Short-term capital gain


Also found in: Acronyms.

Short-term capital gain

A profit on the sale of a security or mutual fund share that has been held for one year or less. A short-term capital gain is taxed as ordinary income.

Short-Term Capital Gain

The gain one realizes by closing a position one has held for less than one year. For example, if one buys a stock or bond and sells it five months later for more than what one paid, the gain is considered a short-term capital gain. The government wishes to encourage long-term investment and, as such, short-term capital gains are usually not entitled to preferential treatment for tax purposes; that is, they are taxed at a higher rate than gains from long-term investments. See also: Short-term capital loss.
References in periodicals archive ?
Because the basis of a partnership interest cannot be segregated to a portion of an interest, basis in the portion of a partnership interest with a long-term holding period could reduce gain attributable to the portion of a partnership interest with a short-term holding period in situations where such interest was recently received in exchange for contributed short-term capital gain property.
Based on this analysis, unless the trust's or estate's governing instrument provides otherwise (or applicable local law deviates from the RUPIA with respect to RIC distributions), short-term capital gain distributions from a RIC to a trust or estate should retain their character as capital gain and thus be allocated to corpus.
For instance, with the changes in Mauritius, Singapore and Cyprus treaties, India got the right to tax short-term capital gains made by investors based in these jurisdictions on sale of shares of Indian companies after April 1, 2017.