Holding Periods

What this video covers

• The standard holding period rule: why the clock starts the day after the trade date, not the settlement date, and why the sale date counts
• Why inherited securities are always long-term, regardless of how long the decedent held them or how quickly the beneficiary sells
• How conversions tack on the prior holding period, since the underlying investment continues in a new form
• Why exercised stock rights start a fresh holding period on the exercise date itself, breaking the usual day-after convention
• The dual rule for gifted securities: when the donor's holding period tacks on (sold at a gain) versus when the clock resets fresh (depreciated gift sold at a loss)
• How to identify a depreciated gift: fair market value below the donor's basis at the time of the gift
• Why stock dividends simply tack onto the holding period of the original shares