How Long Do You Have to Hold a Stock to Get Long-Term Capital Gains?

The difference between a short-term and a long-term gain can be a single day, and on a large gain it can change the tax bill by thousands of dollars. The rule is simple once you know exactly how the IRS counts.

What people on X are asking

In November 2026 an account ran a poll: you sell a stock for a $10,000 gain; how long do you have to hold it to get long-term capital gains rates? In June 2025 a tax-focused post explained that your rate depends on your total income and how long you held the asset: held over a year, you qualify for lower long-term rates. And in February 2025 another noted that short-term gains are taxed like a W-2 job. All correct; the detail is in the counting. This page covers US federal tax only.

The fact-checked answer

The rule. IRS Topic 409 says that generally, if you hold an asset for more than one year before disposing of it, the gain or loss is long-term; if you hold it one year or less, it is short-term. "More than one year" means at least one year and one day.

How to count the days. Topic 409 says you count from the day after the day you acquired the asset up to and including the day you disposed of it. Publication 550 adds, for securities on an established market, that the holding period begins the day after the trade date you bought and ends on the trade date you sold, and warns not to confuse the trade date with the settlement date.

Holding period examples (trade dates)

Based on IRS Topic 409 and Publication 550 counting rules. Gifts, inherited shares, options and some other cases have special rules; see Publication 550. Tap a column header to sort.

Bought on	Sold on	Holding period	Gain is
March 10, 2025	March 10, 2026	Exactly one year	Short-term
March 10, 2025	March 11, 2026	More than one year	Long-term
December 31, 2024	December 31, 2025	Exactly one year	Short-term
December 31, 2024	January 2, 2026	More than one year	Long-term

UXS decision diagram

Will this sale be taxed as a long-term gain?

Text version of the diagram

1. Are these shares you bought yourself (not a gift, inheritance or option exercise)? If no: Special holding-period rules apply; check IRS Publication 550
2. Is the planned sale date at least one year and one day after the purchase trade date? If no: The gain is short-term and taxed at ordinary income rates
3. Did you buy more of the same shares at different times? If yes: Each lot has its own date; tell your broker which lot you are selling
4. Did you sell at a loss and rebuy within 30 days? If yes: The wash sale rule can adjust the holding period and loss
5. Otherwise: The gain is long-term and taxed at 0%, 15% or 20% depending on income

Diagram drawn by UXS. A simplified decision aid for education, not a recommendation.

What the rates are. For tax years beginning in 2025, Topic 409 says the 0% rate applies if taxable income is at or below $48,350 for single filers, $96,700 for married filing jointly and $64,750 for heads of household. The 15% rate applies above those up to $533,400 (single), $600,050 (married filing jointly) and $566,700 (head of household), and 20% above that. Some gains have higher maximum rates, such as 28% for collectibles. Net short-term gains are taxed as ordinary income at graduated rates. Individuals with significant investment income may also owe the net investment income tax.

What a day can cost. On the $10,000 gain in the poll above: for a single filer in the 24% ordinary bracket whose income keeps them in the 15% long-term band, the difference is roughly $2,400 vs $1,500 in federal tax, about $900, before any state tax. That is why checking the trade date before you sell matters.

Losses work the same way. Short-term and long-term losses first offset gains of the same type, then each other. If losses exceed gains, Topic 409 says you can deduct up to $3,000 a year ($1,500 if married filing separately) against other income and carry the rest forward. If you sell at a loss and buy back within 30 days, see the wash sale rule, which can change both the loss and the holding period.

Lots and brokers. If you bought the same stock several times, each purchase (lot) has its own date. If you do not identify which shares you sell, the IRS default for stock is first in, first out (oldest lot first), and brokers usually apply that default unless you pick specific lots or another method. Your broker's Form 1099-B reports whether each sale was short- or long-term, but you are responsible for it being right.

Not just stocks. The same holding-period idea applies to ETFs and to crypto held as property; see how crypto gains are taxed. Futures, some options and dividends have different rules. Active traders rarely hold for a year, which is part of the cost of day trading vs swing trading. For prop firm income, see are prop firm payouts taxable.

If you bought in several lots, you can choose which shares to sell; see which shares get sold first, FIFO or specific lot.

Decision helper

Common mistakes

• Selling exactly one year after buying (still short-term).
• Counting from the settlement date instead of the trade date.
• Not checking which lot the broker's default method sells before a sale near the one-year mark.
• Forgetting state taxes and the net investment income tax.

FAQ

How long do I have to hold a stock for long-term capital gains?

More than one year: sell on or after the day after the one-year anniversary of the purchase trade date.

Is one year exactly long enough?

No; one year or less is short-term.

Do I count from the trade date or the settlement date?

The trade date, according to IRS Publication 550.

What is the long-term capital gains rate?

0%, 15% or 20% depending on taxable income; 0% up to $48,350 for single filers in 2025.

How are short-term gains taxed?

As ordinary income at your regular rates.

Does reinvesting dividends start a new holding period?

Yes; each reinvested purchase is a new lot with its own date.