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.
Learn more about nontaxable distributions on Form 1099-Div Box 3 and get tax answers at H&R Block.
Learn more about section 1202 gains from small business stocks and get tax answers at H&R Block.
Earn extra income by setting up a plan that will earn money as time goes on – even when you are not physically working. Learn more at H&R Block.
Learn more about the sales expenses associated with the sale of stock and how to report it on the tax form 1099-b from the tax experts at H&R Block.