The holding period in real estate refers to the duration of time an investor retains ownership of a property. This interval plays a crucial role in determining the financial outcomes and strategies of the investment, such as potential tax implications, capital appreciation, and cash flow management.
Long-term capital gain refers to the profit earned from the sale of a capital asset that has been held for longer than a specified holding period, allowing it to qualify for favorable tax rates.
A short-term capital gain refers to the profit from the sale of a capital asset that was held for less than 12 months. Unlike long-term capital gains, these gains are typically taxed at higher rates corresponding to ordinary income.
