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Author: RLHS Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Holding period on stock resulting from split Date: 12/8/1997 2:10 PM
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How is the holding period calculated for a new share resulting from a stock split? Does it have to age 18 months to qualify as a long term capital gain/loss?
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Author: KATinChicagoland Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 851 of 121114
Subject: Re: Holding period on stock resulting from split Date: 12/9/1997 1:33 PM
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<<How is the holding period calculated for a new share resulting from a stock split? Does it have to age 18 months to qualify as a long term capital gain/loss?>>

The tax law quite sensibly assigns to the new shares the same holding period as the old shares.

BTW, the holding period for long-term capital gain or loss is still 12 months (actually 12 months plus one day). The difference under the new law is that you may qualify for a better rate if you hold for more than 18 months.

KAT in Chicagoland

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 861 of 121114
Subject: Re: Holding period on stock resulting from split Date: 12/9/1997 3:38 PM
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<<

How is the holding period calculated for a new share resulting from a stock split? Does it have to
age 18 months to qualify as a long term capital gain/loss?>>

KAT provided you with a terrific response on two points:

1. The holding periof of the new "split" shares tacks on to the holding period of the original shares, and

2. Long term capital gain is still defined in the tax code as more than one year...even though you get a better tax rate if you hold an asset for more than 18 months. It's going to take some time for the terminology to cath up with the facts of the issue. Many people (even tax geeks) are beginning to use the terms "short term/mid term/long term". I have even caught myself saying "mid term" (althought I'm trying to stop it). But the official "long term" designation has a much broader impact on the entire tax code than just the capital gains issue.

TMF Taxes
Roy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 860 of 121114
Subject: Re: Holding period on stock resulting from split Date: 12/9/1997 3:38 PM
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<<

How is the holding period calculated for a new share resulting from a stock split? Does it have to
age 18 months to qualify as a long term capital gain/loss?>>

KAT provided you with a terrific response on two points:

1. The holding periof of the new "split" shares tacks on to the holding period of the original shares, and

2. Long term capital gain is still defined in the tax code as more than one year...even though you get a better tax rate if you hold an asset for more than 18 months. It's going to take some time for the terminology to cath up with the facts of the issue. Many people (even tax geeks) are beginning to use the terms "short term/mid term/long term". I have even caught myself saying "mid term" (althought I'm trying to stop it). But the official "long term" designation has a much broader impact on the entire tax code than just the capital gains issue.

TMF Taxes
Roy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 862 of 121114
Subject: Re: Holding period on stock resulting from split Date: 12/9/1997 3:38 PM
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<<

How is the holding period calculated for a new share resulting from a stock split? Does it have to
age 18 months to qualify as a long term capital gain/loss?>>

KAT provided you with a terrific response on two points:

1. The holding periof of the new "split" shares tacks on to the holding period of the original shares, and

2. Long term capital gain is still defined in the tax code as more than one year...even though you get a better tax rate if you hold an asset for more than 18 months. It's going to take some time for the terminology to cath up with the facts of the issue. Many people (even tax geeks) are beginning to use the terms "short term/mid term/long term". I have even caught myself saying "mid term" (althought I'm trying to stop it). But the official "long term" designation has a much broader impact on the entire tax code than just the capital gains issue.

TMF Taxes
Roy

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Author: KATinChicagoland Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 867 of 121114
Subject: Re: Holding period on stock resulting from split Date: 12/10/1997 8:12 AM
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<<Many people (even tax geeks) are beginning to use the terms "short term/mid term/long term". I have even caught myself saying "mid term" (althought I'm trying to stop it). >>

Blame it on the tax-writing staff in Congress. The 1997 Act uses the words "mid-term" to describe gain that is more than one year (and therefore long-term) but not more than 18 months (and therefore not eligible for the 20% rate). By the time they were writing technical corrections, they figured out that it was too confusing to have gains that are called mid-term even though those same gains qualify as long-term, so the technical corrections act, when passed, will do away with the "mid-terminology."

KAT in Chicagoland

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