Series 50: Short- And Long-Term Capital Gains

Short- and Long-Term Capital Gains

When an investor holds a security for one year or less, the IRS will consider the gain/loss to be short-term, and when the investor holds the security for over one year, the IRS will consider the gain/loss to be long-term. Short-term capital gains are taxed at the taxpayer’s ordinary income rate, while long-term gains are taxed at the lower capital gains rate (0% to 20%).

According to the IRS, the holding period clock begins the day after the investment is purchased and ends on the day the investment is sold. The date of purchase and sale are the trade d