Holding Period

 

The holding period is the length of time you own property before you sell it. If you hold property for a year or less, short-term capital gain or loss rules apply. If you hold property for more than a year, long-term capital gain or loss rules apply

For stock, the holding period:

  • Begins the day after you buy the shares, or the day after the trade date
  • Ends the day you sell the shares, or the trade date

Special rules apply if the shares you’re selling were a gift or an inheritance:

  • Gifts — Your holding period includes the time the person who gave you the shares held them. However, your basis might be the fair market value at the date of the gift. If so, your holding period of the gifted stock will begin the day after you received the gift.
  • Inheritances — Your holding period is automatically considered to be more than one year. So, when you sell the inherited stock, it’s subject to long-term capital treatment. This applies regardless of the actual holding period.

Related Topics

Related Resources

How To Calculate A Capital Gain On Property

Do you need to know how to calculate a capital gain on inherited property that was later sold? Learn more from the tax experts at H&R Block.

Reporting Disability Insurance Payments On Taxes

Should you report disability insurance payments as income on your taxes? Learn more from the tax experts at H&R Block.

Report A Cash Gift On Taxes

How should you and your spouse report a joint cash gift on your taxes? Learn more from the tax experts at H&R Block.

Cost Basis

What is the cost basis of stock and other investments? Learn more about calculating the basis and get tax answers from H&R Block.