A gain resulting from the sale of property or a security in which the tax on the gain is deferred until it is actually recognized. In real estate, an exchange of one property for another could result in a gain that would not be recognized until the sale of the replacement property. In securities, a gain in a position that is a part of an identified straddle need not be reported. In both cases the unrecognized gain is cost basis of the original asset are carried forward to the new asset.