Legal Definition of holding period
: the length of time a taxpayer holds property for purposes of determining if any gain realized or loss incurred from it is long-term or short-term
Financial Definition of HOLDING PERIOD
What It Is
Holding period refers to the time during which an investor holds a given security.
How It Works
The holding period for a security is defined as the elapsed time between the initial date of purchase and the date on which the security was sold. A short-term holding period is defined as less than one year while a long-term holding period is defined as one year plus one day and beyond.
To illustrate, the holding period for a security purchased on January 1, 2009 and sold on June 30, 2009 would be six months (short-term), while the holding period for an item purchased on January 1, 2009 and sold on January 31, 2010 would be 13 months, or one year and one month (long-term).
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