Holding Period

The holding period is the length of time you held an asset that you’re selling. It’s measured from the day you purchase the asset through the day you sell it.

Holding periods can be either long-term or short-term. A long-term holding period is one in which you hold an asset for more than 1 year. If you hold an asset for a year or less, it’s considered a short-term holding period. The holding period is important because it determines whether the gain on your sale will be taxed at a favorable rate (long-term) or at the same rate as the rest of your income (short-term).

In the Sale of Stocks, Bonds, Mutual Funds and other Investment Property section of the Interview, we ask you to enter the date purchased (or acquired) and the date sold. We use this information to automatically calculate the holding period for your shares, and the capital gains rate that will apply. Or, if you prefer, you can enter the information directly on the Capital Gains and Losses Worksheet.