What is Holding period?
In short
The holding period is how long a taxpayer has owned property. Capital assets held for more than one year produce long-term gains and losses; those held for one year or less produce short-term ones.
Key takeaways
- The holding period carries over (tacks) for gifts with a carryover basis and for property received in a like-kind exchange.
- Inherited property is always treated as held for more than one year.
- Shares bought in a wash sale take over the holding period of the shares sold.
Where it's tested
REG: Property Transactions: Gains, Losses & Like-Kind Exchanges — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An individual inherits stock and sells it two months later at a gain. How is the holding period treated?