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Test - Unit 3: Understanding Taxes
19
Select the correct answer.
To minimize the effect of capital gains tax, what is the least amount of time for which an investment should be held?
A.
6 months
B.
3 years
C.
366 days
OD.
1.5 years
E.
2 years
Reset
Next

Sagot :

GinnyAnswer
To minimize the effect of capital gains tax, an investment should be held for a duration that qualifies it as a long-term capital gain. Long-term capital gains typically benefit from a lower tax rate compared to short-term capital gains. The minimum duration for holding an investment to be considered a long-term capital gain is more than one year.

Given the options:
A. 6 months
B. 3 years
C. 366 days
D. 1.5 years
E. 2 years

Among these, 366 days is the smallest duration that exceeds one year by a day, thus making the investment qualify for long-term capital gains tax treatment.

Therefore, the correct answer is:
C. 366 days
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