US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 1223

Holding period of property

For purposes of this subtitle—
(1)
In determining the period for which the taxpayer has held property received in an exchange, there shall be included the period for which he held the property exchanged if, under this chapter, the property has, for the purpose of determining gain or loss from a sale or exchange, the same basis in whole or in part in his hands as the property exchanged, and, in the case of such exchanges the property exchanged at the time of such exchange was a capital asset as defined in section 1221 or property described in section 1231. For purposes of this paragraph—
(A)
an involuntary conversion described in section 1033 shall be considered an exchange of the property converted for the property acquired, and
(B)
a distribution to which section 355 (or so much of section 356 as relates to section 355) applies shall be treated as an exchange.
(2)
In determining the period for which the taxpayer has held property however acquired there shall be included the period for which such property was held by any other person, if under this chapter such property has, for the purpose of determining gain or loss from a sale or exchange, the same basis in whole or in part in his hands as it would have in the hands of such other person.
(3)
In determining the period for which the taxpayer has held stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under section 1091 relating to wash sales) of the loss from the sale or other disposition of substantially identical stock or securities, there shall be included the period for which he held the stock or securities the loss from the sale or other disposition of which was not deductible.
(4)
In determining the period for which the taxpayer has held stock or rights to acquire stock received on a distribution, if the basis of such stock or rights is determined under section 307, there shall (under regulations prescribed by the Secretary) be included the period for which he held the stock in the distributing corporation before the receipt of such stock or rights upon such distribution.
(5)
In determining the period for which the taxpayer has held stock or securities acquired from a corporation by the exercise of rights to acquire such stock or securities, there shall be included only the period beginning with the date on which the right to acquire was exercised.
[(6)
Pub. L. 113–295, div. A, title II, § 221(a)(80)(C)128 Stat. 4049 Repealed. , , .]
(7)
In determining the period for which the taxpayer has held a commodity acquired in satisfaction of a commodity futures contract (other than a commodity futures contract to which section 1256 applies) there shall be included the period for which he held the commodity futures contract if such commodity futures contract was a capital asset in his hands.
[(8)
Pub. L. 113–295, div. A, title II, § 221(a)(80)(C)128 Stat. 4049 Repealed. , , .]
(9)
In the case of a person acquiring property from a decedent or to whom property passed from a decedent (within the meaning of section 1014(b)), if—
(A)
the basis of such property in the hands of such person is determined under section 1014, and
(B)
such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death,
then such person shall be considered to have held such property for more than 1 year.
(10)
If—
(A)
property is acquired by any person in a transfer to which section 1040 applies,
(B)
such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death, and
(C)
such sale or disposition is to a person who is a qualified heir (as defined in section 2032A(e)(1)) with respect to the decedent,
then the person making such sale or other disposition shall be considered to have held such property for more than 1 year.
(11)
In determining the period for which the taxpayer has held qualified replacement property (within the meaning of section 1042(b)) the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale of qualified securities (within the meaning of section 1042(b)), there shall be included the period for which such qualified securities had been held by the taxpayer.
(12)
In determining the period for which the taxpayer has held property the acquisition of which resulted under section 1043 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property had been held as of the date of such sale.
(13)
Except for purposes of subsections (a)(2) and (c)(2)(A) of section 1202, in determining the period for which the taxpayer has held property the acquisition of which resulted under section 1045 or 1397B in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property has been held as of the date of such sale.
(14)
If the security to which a securities futures contract (as defined in section 1234B) relates (other than a contract to which section 1256 applies) is acquired in satisfaction of such contract, in determining the period for which the taxpayer has held such security, there shall be included the period for which the taxpayer held such contract if such contract was a capital asset in the hands of the taxpayer.
(15)

Cross reference.—

For special holding period provision relating to certain partnership distributions, see section 735(b).

Aug. 16, 1954, ch. 73668A Stat. 323Pub. L. 87–834, § 14(b)(3)76 Stat. 1041Pub. L. 91–614, title I, § 101(g)84 Stat. 1838Pub. L. 94–455, title XIV, § 1402(b)(1)(Q)90 Stat. 1732Pub. L. 95–600, title VII, § 702(c)(5)92 Stat. 2927Pub. L. 96–223, title IV, § 401(a)94 Stat. 299Pub. L. 97–448, title I96 Stat. 2382Pub. L. 98–369, div. A, title I, § 54(c)98 Stat. 569Pub. L. 100–647, title I, § 1006(e)(17)102 Stat. 3403Pub. L. 101–194, title V, § 502(b)(1)103 Stat. 1754Pub. L. 105–34, title III111 Stat. 840Pub. L. 105–206, title V, § 5001(a)(5)112 Stat. 788Pub. L. 106–554, § 1(a)(7) [title I, § 116(b)(2), title IV, § 401(h)(1)]114 Stat. 2763Pub. L. 108–357, title IV, § 413(c)(21)118 Stat. 1509Pub. L. 109–135, title IV, § 402(a)(2)119 Stat. 2610Pub. L. 113–295, div. A, title II, § 221(a)(80)128 Stat. 4049Pub. L. 115–141, div. U, title IV, § 401(d)(4)(B)(vi)132 Stat. 1209(, ; , , ; , , ; , (2), title XIX, § 1906(b) (13)(A), , , 1834; , , ; , , ; , §§ 104(b)(3)(C), 105(c)(4), , , 2385; , title V, § 541(b)(1), title X, § 1001(b)(14), (e), , , 890, 1011, 1012; , , ; , , ; , §§ 312(d)(9), 313(b)(2), , , 842; , title VI, § 6005(d)(4), , , 805; , , , 2763A–603, 2763A–650; , , ; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 115–1412018—Par. (13). substituted “subsections (a)(2) and (c)(2)(A) of section 1202” for “sections 1202(a)(2), 1202(c)(2)(A), 1400B(b), and 1400F(b)”.

Pub. L. 113–295, § 221(a)(80)(A)2014—Par. (1). , struck out “after ,” after “such exchanges” in introductory provisions.

Pub. L. 113–295, § 221(a)(80)(B)Par. (4). , struck out “(or under so much of section 1052(c) as refers to section 113(a)(23) of the Internal Revenue Code of 1939)” after “section 307”. Amendment was executed to reflect the probable intent of Congress notwithstanding a second set of quotation marks around the text directed to be stricken.

Pub. L. 113–295, § 221(a)(80)(C)Par. (6). , struck out par. (6) which read as follows: “In determining the period for which the taxpayer has held a residence, the acquisition of which resulted under section 1034 (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) in the nonrecognition of any part of the gain realized on the sale or exchange of another residence, there shall be included the period for which such other residence had been held as of the date of such sale or exchange. For purposes of this paragraph, the term ‘sale or exchange’ includes an involuntary conversion occurring after , and before .”

Pub. L. 113–295, § 221(a)(80)(C)Par. (8). , struck out par. (8) which read as follows: “Any reference in this section to a provision of this title shall, where applicable, be deemed a reference to the corresponding provision of the Internal Revenue Code of 1939, or prior internal revenue laws.”

Pub. L. 109–13545 Stat. 81848 Stat. 7052005—Pars. (3) to (16). redesignated pars. (4) to (16) as (3) to (15), respectively, and struck out former par. (3) which read as follows: “In determining the period for which the taxpayer has held stock or securities received upon a distribution where no gain was recognized to the distributee under section 1081(c) (or under section 112(g) of the Revenue Act of 1928, , or the Revenue Act of 1932, ), there shall be included the period for which he held the stock or securities in the distributing corporation before the receipt of the stock or securities on such distribution.”

Pub. L. 108–3572004—Pars. (10) to (17). redesignated pars. (11) to (17) as (10) to (16), respectively, and struck out former par. (10) which read as follows: “In determining the period for which the taxpayer has held trust certificates of a trust to which subsection (d) of section 1246 applies, or the period for which the taxpayer has held stock in a corporation to which subsection (d) of section 1246 applies, there shall be included the period for which the trust or corporation (as the case may be) held the stock of foreign investment companies.”

Pub. L. 106–554, § 1(a)(7) [title I, § 116(b)(2)]2000—Par. (15). , amended par. (15) generally. Prior to amendment, par. (15) read as follows: “In determining the period for which the taxpayer has held property the acquisition of which resulted under section 1045 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property has been held as of the date of such sale.”

Pub. L. 106–554, § 1(a)(7) [title IV, § 401(h)(1)]Pars. (16), (17). , added par. (16) and redesignated former par. (16) as (17).

Pub. L. 105–206, § 6005(d)(4)1998—Pars. (11), (12). , substituted “18 months” for “1 year” in subpar. (B) and concluding provisions.

Pub. L. 105–206, § 5001(a)(5), substituted “1 year” for “18 months” in subpar. (B) and concluding provisions.

Pub. L. 105–34, § 312(d)(9)1997—Par. (7). , inserted “(as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997)” after “section 1034”.

Pub. L. 105–34, § 313(b)(2)Pars. (15), (16). , added par. (15) and redesignated former par. (15) as (16).

Pub. L. 101–1941989—Pars. (14), (15). added par. (14) and redesignated former par. (14) as (15).

Pub. L. 100–6471988—Par. (14). amended par. (14) generally, substituting “reference” for “references” in heading, striking out “(A)” before “For special holding”, and striking out subpar. (B) which related to distributions of appreciated property to corporations.

Pub. L. 98–369, § 1001(b)(14)1984—Pars. (11), (12). , (e), substituted “6 months” for “1 year”, applicable to property acquired after , and before . See Effective Date of 1984 Amendment note below.

Pub. L. 98–369, § 541(b)(1)Par. (13). , added par. (13). Former par. (13) redesignated (14).

Pub. L. 98–369, § 541(b)(1)Par. (14). , redesignated former par. (13) as (14).

Pub. L. 98–369, § 54(c), designated existing cross reference as subpar. (A) and added subpar. (B).

Pub. L. 97–448, § 105(c)(4)1983—Par. (8). , inserted “(other than a commodity futures contract to which section 1256 applies)” after “acquired in satisfaction of a commodity futures contract”.

Pub. L. 97–448, § 104(b)(3)(C)Pars. (12), (13). , added par. (12) and redesignated former par. (12) as (13).

Pub. L. 96–223Pub. L. 95–6001980—Par. (11)(A). repealed the amendment made by . See 1978 Amendment note below.

Pub. L. 95–6001978—Par. (11)(A). inserted reference to determination of basis of property under section 1023. See Repeals note below.

Pub. L. 94–455, § 1906(b)(13)(A)1976—Par. (5). , struck out “or his delegate” after “Secretary”.

Pub. L. 94–455, § 1402(b)(2)Par. (11). , provided that “9 months” would be changed to “1 year”.

Pub. L. 94–455, § 1402(b)(1)(Q), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.

Pub. L. 91–6141970—Pars. (11), (12). added par. (11) and redesignated former par. (11) as (12).

Pub. L. 87–8341962—Pars. (10), (11). added par. (10) and redesignated former par. (10) as (11).

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Pub. L. 113–295section 221(b) of Pub. L. 113–295section 1 of this titleAmendment by effective , subject to a savings provision, see , set out as a note under .

Effective Date of 2005 Amendment

Pub. L. 109–135Pub. L. 109–5815 U.S.C. 79section 402(m) of Pub. L. 109–135section 23 of this titleAmendment by effective as if included in the provisions of the Energy Policy Act of 2005, , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( et seq.) before its repeal, see , set out as an Effective and Termination Dates of 2005 Amendments note under .

Effective Date of 2004 Amendment

Pub. L. 108–357section 413(d)(1) of Pub. L. 108–357section 1 of this titleAmendment by applicable to taxable years of foreign corporations beginning after , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see , set out as an Effective and Termination Dates of 2004 Amendments note under .

Effective Date of 2000 Amendment

Pub. L. 106–554Pub. L. 106–554section 1016 of this titleAmendment by section 1(a)(7) [title I, § 116(b)(2)] of applicable to qualified empowerment zone assets acquired after , see section 1(a)(7) [title I, § 116(c)] of , set out as a note under .

Pub. L. 106–554Pub. L. 106–554section 1032 of this titleAmendment by section 1(a)(7) [title IV, § 401(h)(1)] of effective , see section 1(a)(7) [title IV, § 401(j)] of , set out as a note under .

Effective Date of 1998 Amendment

section 5001(a)(5) of Pub. L. 105–206section 5001(b)(2) of Pub. L. 105–206section 1 of this titleAmendment by effective , see , set out as a note under .

section 6005(d)(4) of Pub. L. 105–206Pub. L. 105–34section 6024 of Pub. L. 105–206section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, , to which such amendment relates, see , set out as a note under .

Effective Date of 1997 Amendment

section 312(d)(9) of Pub. L. 105–34section 312(d) of Pub. L. 105–34section 121 of this titleAmendment by applicable to sales and exchanges after , with certain exceptions, see , set out as a note under .

section 313(b)(2) of Pub. L. 105–34section 313(c) of Pub. L. 105–34section 1016 of this titleAmendment by applicable to sales after , see , set out as a note under .

Effective Date of 1989 Amendment

Pub. L. 101–194section 502(c) of Pub. L. 101–194section 1016 of this titleAmendment by applicable to sales after , see , set out as a note under .

Effective Date of 1988 Amendment

Pub. L. 100–647Pub. L. 99–514section 1019(a) of Pub. L. 100–647section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .

Effective Date of 1984 Amendment

section 541(b)(1) of Pub. L. 98–369section 541(c) of Pub. L. 98–369section 1042 of this titleAmendment by applicable to sales of securities in taxable years beginning after , see , set out as an Effective Date note under .

section 1001(b)(14) of Pub. L. 98–369section 1001(e) of Pub. L. 98–369section 166 of this titleAmendment by applicable to property acquired after , and before , see , set out as a note under .

Effective Date of 1983 Amendment

Pub. L. 97–448Pub. L. 97–34section 109 of Pub. L. 97–448section 1 of this titleAmendment by effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, , to which such amendment relates, see , set out as a note under .

Effective Date of 1980 Amendment and Revival of Prior Law

Pub. L. 96–223section 702(c)(5) of Pub. L. 95–600Pub. L. 96–223section 1023 of this titleAmendment by (repealing and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after , and except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of , set out as a note under .

Effective Date of 1978 Amendment

Pub. L. 95–600Pub. L. 94–455section 702(c)(10) of Pub. L. 95–600section 1014 of this titleAmendment by to take effect as if included in the amendments and additions made by, and the appropriate provisions of , see , set out as a note under .

Effective Date of 1976 Amendment

Pub. L. 94–455, title XIV, § 1402(b)(1)90 Stat. 1731, , , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.

Pub. L. 94–455, title XIV, § 1402(b)(2)90 Stat. 1732, , , provided that the amendment made by that section is effective with respect to taxable years beginning after .

Effective Date of 1970 Amendment

Pub. L. 91–614section 101(j) of Pub. L. 91–614section 2032 of this titleAmendment by applicable with respect to decedents dying after , see , set out as a note under .

Effective Date of 1962 Amendment

Pub. L. 87–834section 14(c) of Pub. L. 87–834section 312 of this titleAmendment by applicable with respect to taxable years beginning after , see , set out as a note under .

Repeals

Pub. L. 95–600, § 702(c)(5)Pub. L. 96–223, title IV, § 401(a)94 Stat. 299, cited as a credit to this section, and the amendments made thereby, were repealed by , , resulting in the text of this section reading as it read prior to enactment of section 702(c)(5). See Effective Date of 1980 Amendment and Revival of Prior Law note set out above.

Savings Provision

Pub. L. 115–141section 401(d)(4)(C) of Pub. L. 115–141section 1400 of this titleAmendment by not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before , see , set out as a note under former .

Pub. L. 115–141section 401(e) of Pub. L. 115–141section 23 of this titleFor provisions that nothing in amendment by be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to , for purposes of determining liability for tax for periods ending after , see , set out as a note under .