CFP

AAA

Tax Consequences - Holding Period

Holding Period
Sales of capital assets should always be classified as either short-term or long-term held assets. Short-term assets are those held for one year or less, and long-term assets are held for more than one year. Sales of these assets are typically reported on Schedule D for the federal tax return filing.  


Assets held for one year or less:
Gains and losses of assets held for one year or less are categorized as short-term, and they're reported in Part I of Schedule D. These short-term gains and losses can be netted against each other to determine the net ST gain or loss.

Assets held for more than one year:
Gains and losses of assets held for more than one year are categorized as long-term, and they're reported in Part II of Schedule D. These long-term gains and losses can be netted against each other to determine the net LT gain or loss. Long-term gains typically receive a more favorable tax treatment than short-term gains.

After short-term gains and losses and long-term gains and losses are netted separately in parts I and II of Schedule D, they can then be netted together for an overall net result. Net loss in excess of net gains is deductible up to the $3,000 capital loss. If the loss was not completely exhausted, it can be carried forward to future tax returns.
Sale of Residence
comments powered by Disqus
Related Articles
  1. Hypothesis Testing in Finance: Concept ...
    Active Trading Fundamentals

    Hypothesis Testing in Finance: Concept ...

  2. Top 6 Ways To Recession-Proof Your Job
    Personal Finance

    Top 6 Ways To Recession-Proof Your Job

  3. The Illusion Of Diversification: The ...
    Fundamental Analysis

    The Illusion Of Diversification: The ...

  4. Solutions For Concentrated Positions
    Investing Basics

    Solutions For Concentrated Positions

  5. Introduction To The Portfolio Dedicated ...
    Investing Basics

    Introduction To The Portfolio Dedicated ...

Trading Center