Stock Basis and Holding Period

Capital Gains, Minimal Taxes: The Essential Guide for Investors and Traders

Stock basis is one of the ingredients in determining the amount of gain or loss you have in a sale. Your holding period tells which category of gain or loss you have: short-term or long-term. These pages explain how to determine your basis and holding period for stock you acquire in various circumstances.

Basis of Stock You Purchase
Here we cover the general rule for ordinary stock purchases that are not affected by the operation of some other rule, such as the wash sale rule.

Acquiring Stock Through a DRIP
Special rules may apply if you participate in a dividend reinvestment plan.

Stock Received as a Gift
You’ll need information from the donor if you receive stock as a gift.

Acquiring Stock from Your Spouse
Many people find this rule surprising.

Inherited Stock
Unique rules are used to determine the basis and holding period of inherited assets, including stock.

Exercising an Option
You can acquire stock by exercising a call option you bought, or by selling a put option and having it assigned (exercised). Here are the basis and holding period rules.

Option Status: ISO or Nonqualified
If you received an option as compensation for services, you need to know whether it’s an incentive stock option (ISO) or nonqualified stock option.

Stock from Nonqualified Options
This page explains how to determine your basis and holding period for stock received when you exercise a nonqualified stock option.

Stock from ISOs
Your basis in stock acquired by exercising incentive stock options depends on circumstances.

Stock Dividends and Splits
Here’s how to determine your basis and holding period for shares you receive as a result of stock dividends or splits.

Scroll to Top