2.5.1. 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 inves