The holding period is the length of time an asset has been owned, measured from the day after it was acquired to the day it is disposed of. It is tracked for each tax lot separately and determines whether the gain or loss on that lot is treated as short-term or long-term.
The count starts on the day after the units were acquired and runs to the day of the sale. It belongs to the tax lot: a token bought on three dates has three holding periods running at once, and a sale takes the holding period of whichever lot it consumes. A partial sale leaves the rest of the lot with its original date.
Moving units between wallets the holder controls does not restart the count. The lot travels with its acquisition date. Units received as income, such as staking rewards, start their holding period on the day after they were received. Units received in a swap start on the day after the swap, because the swap closed the old lot and opened a new one.
Because the holding period is a property of the lot, the choice of lot decides it. FIFO tends to consume the oldest lots and so favours long-term results. HIFO and LIFO often consume recent lots and so tend to produce short-term ones.
Units acquired on 15 March 2024 have a holding period that begins on 16 March 2024. A sale on 15 March 2025 is a holding period of not more than one year, so short-term. A sale on 16 March 2025 is more than one year, so long-term. One day separates the two results.
Under section 1222, a gain or loss on a capital asset is long-term if the asset was held for more than one year and short-term otherwise. The holding period begins on the day after acquisition, and a sale on the anniversary of the acquisition date is not more than one year. Long-term gains of individuals are taxed at lower rates than short-term gains, so the classification of each lot has a direct effect on the tax due. Form 8949 separates short-term and long-term dispositions into different parts, and each line carries the acquisition date of its lot.
Under Regulations section 1.1012-1(j), for units acquired or disposed of on or after January 1, 2025, the lot a sale consumes is determined within the wallet or account that held the units: by FIFO unless the taxpayer makes an adequate identification of the units sold. The identification, where made, must be supported by records sufficient to establish the holding period of the identified units as well as their basis. A record that shows the cost of a lot but not its acquisition date does not support a long-term claim.
Units bought in 2021 are transferred to a new wallet in November 2024. The wallet import records the receipt as an acquisition on the transfer date. A sale in April 2025 is reported as short-term with a five-month holding period and taxed at ordinary rates, when the lot had been held for more than three years. The transfer was never matched to its sending side, and the date acquired on Form 8949 is the date the units moved.
Read our Universal vs Wallet-Based Cost Tracking
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