On February 1, 2012, a taxpayer buys 10 shares of X Corp. What is the earliest date that the stock can be sold to qualify for long-term treatment?
a. Incorrect. A long-term holding period of more than one year is not satisfied simply because the sale occurs within the year following the year of purchase.
b. Incorrect. A sale on February 1, 2013, results in short-term treatment because the stock has been held for only one year.
c. Correct. For long-term treatment to apply, the stock must be held for at least a year and a day, which is February 2, 2013.
d. Incorrect. The fact that February 5, 2013, is the settlement date for a sale of stock occurring on February 2, does not impact the holding period.