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Long-term gains (on property held more than one year) are taxed at a special lower rate, generally at no more than 15 percent; gains on property held for one year or less are taxed at your ordinary income tax rate, which may be as high as 35 percent in 2010. Short-term gains are reported in Part I of Schedule D, and long-term gains are reported in Part II. (Remember: These transactions are first itemized on Form 8949 and then the totals are transferred to Schedule D.)
If you acquired property in a nontaxable trade, your holding period for the property will begin on the day following the date you acquired the original property that you gave up in the trade.
If you received property by gift and your basis is determined by your donor's basis, your holding period begins when the donor acquired the property. If you must use the FMV at the time of the gift as your basis, your holding period begins when you received the gift.
If you received the property by bequest or inheritance, your holding period is always considered "long term" and you will get the benefit of the lower tax rate on capital gains even if you sell the property the day after you receive it.
If you sell stock that you acquired as part of a spin-off or stock dividend, your holding period begins on the same date as the original investment.
There are additional rules and options if you made multiple purchases of a stock or mutual fund on different days, particularly if you sell only part of your investment.