Computing the Holding Period:
1. Acquisition and Disposition Dates:
a. acquisition day is excluded
b. disposition day is included
i. if an asset is acquired on Feb 1 of this year and disposed of on Feb 1 of next year it cannot qualify as LTKG or LTKL
2. Crucial to calculating the holding period, is the determination of when the sale or exchange was consummated.
a. McFeely: the date the deed is actually delivered, not the contract date, determines the date of acquisition.
i. Rev. Rul. 69-93 is similar. Look at when the incidents of ownership have changed hands (e.g., when title passed, when closing occurred).
b. Merrill: A somewhat different analysis. We’re not as concerned with the formalisms of title transfers and closing dates as we are with the “benefits and burdens of ownership.” Under the Merrill analysis, transfer may have occurred prior to transfer of title. (This is anti-taxpayer b/c it makes it harder to reach the one-year holding period and, thus, harder to get LT treatment.)
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