Holding period

Length of time a security is held.

Holding Period

1. In a long position, the period of time during which one owns a security. The holding period is important to calculating an investment's returns and performance. The holding period also applies to taxation on capital gains, as long-term investments are not taxed as heavily as short-term ones.

2. In a short sale, the period of time between the borrowing of securities and the return to their owner. That is, the holding period is the entire time elapsed for all the transactions of a short sale.

holding period

The length of time during which a security is owned.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Holding period.

A holding period is the length of time you keep an investment.

In some cases, a specific holding period is required in order to qualify for some benefit. For example, you must hold US savings bonds for a minimum of five years to collect the full amount of interest that has accrued.

holding period

(1) A time period important in the law of adverse possession,with its own peculiar rules for calculation. See adverse possession for more information. (2) A period of time one owns property, important in tax law for determining tax rates and benefits and for disallowance of some benefits.

Examples:

• Property exchanged in a 1031 exchange by related parties has a 2-year holding period before it can be sold; otherwise there will be adverse tax consequences.

• Banks have a 21-day holding period before sending taxpayer bank deposits to the IRS pursuant to a garnishment.

• Property sold after a holding period of 1 year or less will result in short-term capital gains or losses.

• Property sold after a holding period of more than 1 year will result in long-term capital gains or losses.

• Property sold after a holding period of more than 5 years will result in super-long-term capital gains or losses.

• Property acquired by inheritance will be treated as if it were held for longer than 1 year.

Holding Period

The period of time property has been owned for income tax purposes. The holding period determines if gain or loss from the sale or exchange of a capital asset is long or short term.