Is There a Minimum Holding Period for a Derivative to Qualify as Long-Term?
Yes, for non-Section 1256 derivatives (standard capital assets), the holding period must be more than one year (i.e. one year and one day) to qualify for long-term capital gains tax treatment. If the derivative is a Section 1256 contract, the holding period is irrelevant due to the mandatory 60/40 rule.
Glossar
Long-Term Capital Gains
Benefit ⎊ Long-term capital gains represent the profit realized from the sale of a capital asset, including certain cryptocurrencies and financial derivatives, held for a period exceeding one year.
Minimum Holding Period
Constraint ⎊ The Minimum Holding Period defines the shortest duration an investor must retain ownership of a tokenized asset or governance token before they are eligible to participate in voting or claim staking rewards.
Holding Period
Duration ⎊ This term defines the intended time frame an investor plans to maintain a specific asset position or derivative contract before initiating a liquidation or rebalancing action.