Question

To minimize the effect of capital gains tax, what is the least amount of time for which an investment should be held?

Answer 1

Answer:

C) 366 days

Step-by-step explanation:

Capital gains taxes are classified into:

1. Short term capital gains which are taxed at the same marginal tax rate than ordinary income. Any investment held for one year or less is subject to short term capital gains.
2. Long term capital gains which are taxed at a generally lower tax rate, e.g. 0 - 15% - 20%. An investment must be held for more than one year to be considered a long term capital gain.