Capital Gains and Losses: The Difference Between Short-term and Long-term Capital Gains

Short-term capital gains are capital gains earned on the sale of securities and mutual fund shares held for one year or less. If you hold an investment for more than one year, any gain on the sale of the asset is considered long-term and is taxed at a more favorable capital gains tax rate.  The date a security is acquired is the trade date +1 and the date of sale is the trade date.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.