let “unrealized gains” be taxed if they were ever used as collateral for a loan.

This simply makes no sense as a concept. Collateral is something that you tell the one you’re borrowing from “you can have this if I fail to pay my loan back”. If the loan is repaid, literally nothing happens to the collateral, and it plays zero part in the actual transaction. There is zero non-arbitrary reason to tax an asset just because it was used as collateral.

Also, all home equity loans would fall under this definition, as well.