Short-short test

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Short-short test

A repealed IRS restriction, that used to limit profits from short-term trading, which three months, to 30% of gross income. The penalty for exceeding this limit would be the loss of certain tax-free benefits.

Short-Short Test

A former IRS restriction that limited returns on investments of less than three months to 30% of gross income. The penalty for accruing more than this was the loss of certain other tax breaks. This test negatively impacted mutual funds, the managers of which needed to ensure that they were not too successful. The short-term test was repealed with the Taxpayer Relief Act of 1997.