Part 1 Property Sales, Basis and Capital Gains question: shares on March

Part 1Property Sales, Basis and Capital Gains

Cleo bought shares on March 3, 2024 and sold them at a gain on March 3, 2025. How is the gain treated?

A As a long-term capital gain
B As ordinary income from a dealer
C As a short-term capital gain
D As a long-term gain if held over 360 days

Show the answer and explanation

Answer: C. As a short-term capital gain

A gain is long-term only if the asset was held more than one year. The holding period begins the day after acquisition and includes the day of sale, so shares bought on March 3, 2024 must be sold on or after March 4, 2025 for long-term treatment. Cleo held them exactly one year, so the gain is short-term. Source: IRC 1222(3); Pub. 550 (2025), Holding Period. Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Treating exactly one year as long-term.

Practice more Part 1 Property Sales, Basis and Capital Gains questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practicing →

Study note: Property Sales, Basis and Capital Gains Part 1practice questions & mock exams

Related Part 1 practice questions

Gina bought a house in January 2021, rented it out until December 2022, then lived in it as her main home from January 2023 until she sold it in November 2025. Can she exclude gain under section 121?Ben's father gave him land with an adjusted basis of $10,000 and a fair market value of $7,000 at the gift. No gift tax was paid. Ben sold it for $8,000. What is his gain or loss?Dana is single and pays all the costs of her own home. Her widowed mother lives all year in a nursing home, and Dana pays more than half of that cost. Her mother's only income is $4,100 of interest. What is Dana's best 2025 filing status?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practicing →

Original study material mapped to the public IRS SEE content outlines; not a real exam question.Not affiliated with or endorsed by the IRS or PSI. Verify figures and rules against current guidance before relying on them.