Title 26 — Internal Revenue Code
Part III · Chapter 1 — Normal Taxes and Surtaxes
§ 1222. Other terms relating to capital gains and losses
Statutory text
For purposes of this subtitle—
Short-term capital gain
The term “short-term capital gain” means gain from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent such gain is taken into account in computing gross income.
Short-term capital loss
The term “short-term capital loss” means loss from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.
Long-term capital gain
The term “long-term capital gain” means gain from the sale or exchange of a capital asset held for more than 1 year, if and to the extent such gain is taken into account in computing gross income.
Long-term capital loss
The term “long-term capital loss” means loss from the sale or exchange of a capital asset held for more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.
Net short-term capital gain
The term “net short-term capital gain” means the excess of short-term capital gains for the taxable year over the short-term capital losses for such year.
Net short-term capital loss
The term “net short-term capital loss” means the excess of short-term capital losses for the taxable year over the short-term capital gains for such year.
Net long-term capital gain
The term “net long-term capital gain” means the excess of long-term capital gains for the taxable year over the long-term capital losses for such year.
Net long-term capital loss
The term “net long-term capital loss” means the excess of long-term capital losses for the taxable year over the long-term capital gains for such year.
Capital gain net income
The term “capital gain net income” means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.
Net capital loss
The term “net capital loss” means the excess of the losses from sales or exchanges of capital assets over the sum allowed under section 1211. In the case of a corporation, for the purpose of determining losses under this paragraph, amounts which are short-term capital losses under section 1212(a)(1) shall be excluded.
Net capital gain
The term “net capital gain” means the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 322 · 68A Stat. 322
Enacted · 26 U.S.C. § 1222
Aug. 16, 1954, ch. 736, 68A Stat. 322
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 322Revenue Act of 1964
Pub. L. 88–272 title II § 230(b) · 78 Stat. 19
Struck · 26 U.S.C. § 1222(9); 26 U.S.C. § 1222(10)
Pub. L. 88–272 struck out provisions from par. (9) relating to taxpayers other than corporations
Inserted · 26 U.S.C. § 1222(9); 26 U.S.C. § 1222(10)
Pub. L. 88–272 inserted “In the case of a corporation” in par. (10)
Source evidence
Code amendment note
Pars. (9), (10). Pub. L. 88–272 struck out provisions from par. (9) relating to taxpayers other than corporations, and inserted “In the case of a corporation” in par. (10).Enacted provision · exact public law section
(b) Technical Amendments.— (1) Section 1222(9) (relating to net capital gain) is amended to read as follows: “(9) Net capital gain.— In the case of a corporation, the term ‘net capital gain’ means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.” (2) The second sentence of section 1222(10) (relating to net capital loss) is amended by striking out “For the purpose” and inserting in lieu thereof “In the case of a corporation, for the purpose”.Tax Reform Act of 1969
Pub. L. 91–172 § 513(c) · 83 Stat. 487
Substituted · 26 U.S.C. § 1222(9)
Pub. L. 91–172, § 513(c), substituted “The” for “In the case of a corporation, the”
Source evidence
Code amendment note
Par. (9). Pub. L. 91–172, § 513(c), substituted “The” for “In the case of a corporation, the”.Enacted provision · exact public law section
(c) Conforming Amendment.— Section 1222(9) (defining net capital 78 Stat. 100. 26 USC 1222. gain) is amended by striking out “In the case of a corporation, the” and inserting in lieu thereof “The”.Tax Reform Act of 1969
Pub. L. 91–172 § 511(a) · 83 Stat. 487
Added · 26 U.S.C. § 1222(11)
Pub. L. 91–172, § 511(a), added par. (11)
Source evidence
Code amendment note
Par. (11). Pub. L. 91–172, § 511(a), added par. (11).Enacted provision · exact public law section
(a) Definition of Net Section 1201 Gain.— Section 1222 (relating 68A Stat. 322. to definition of terms applicable to capital gains and losses) is amended by adding at the end thereof the following new paragraph: “(11) Net section 1201 gain.— The term ‘net section 1201 gain’ means the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.”Pub. L. 94–455 § 1402(a)(2) · 90 Stat. 1520
Changed · 26 U.S.C. § 1222(1)(4)
Pub. L. 94–455, § 1402(a)(2), provided that “9 months” would be changed to “1 year”
Source evidence
Code amendment note
Pars. (1) to (4). Pub. L. 94–455, § 1402(a)(2), provided that “9 months” would be changed to “1 year”.Enacted provision · exact public law section
(2) Taxable years beginning after 1977.— Effective with respect to taxable years beginning after December 31, 1977, paragraphs (1), (2), (3), and (4) of section 1222 are each amended by striking out “9 months” and inserting in lieu thereof “1 year”.Pub. L. 94–455 § 1402(a)(1) · 90 Stat. 1520
Changed · 26 U.S.C. § 1222(1)(4)
Pub. L. 94–455, § 1402(a)(1), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 94–455, § 1402(a)(1), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.Enacted provision · exact public law section
(1) Taxable years beginning in 1977.— Effective with respect to taxable years beginning in 1977, paragraphs (1), (2), (3), and (4) of section 1222 (relating to other terms relating to capital 26 USC 1222. gains and losses) are each amended by striking out “6 months” and inserting in lieu thereof “9 months”.Pub. L. 94–455 § 1901(a)(136)(A) · 90 Stat. 1520
Substituted · 26 U.S.C. § 1222(9)
Pub. L. 94–455, § 1901(a)(136)(A), substituted “Capital gain net income” and “capital gain net income” for “Net capital gain” and “net capital gain” in heading and text
Source evidence
Code amendment note
Par. (9). Pub. L. 94–455, § 1901(a)(136)(A), substituted “Capital gain net income” and “capital gain net income” for “Net capital gain” and “net capital gain” in heading and text.Enacted provision · exact public law section
(A) Paragraph (9) of section 1222 (relating to definition 26 USC 1222. of terms applicable to capital gains and losses) is amended to read as follows: “(9) Capital gain net income.— The term ‘capital gain net income’ means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.”Pub. L. 94–455 § 1901(a)(136)(B) · 90 Stat. 1520
Substituted · 26 U.S.C. § 1222(11)
Pub. L. 94–455, § 1901(a)(136)(B), substituted “Net capital gain” and “net capital gain” for “Net section 1201 gain” and “net section 1201 gain” in heading and text
Source evidence
Code amendment note
Par. (11). Pub. L. 94–455, § 1901(a)(136)(B), substituted “Net capital gain” and “net capital gain” for “Net section 1201 gain” and “net section 1201 gain” in heading and text.Enacted provision · exact public law section
(B) Paragraph (11) of section 1222 (relating to definition of terms applicable to capital gains and losses) is amended to read as follows: “(11) Net capital gain.— The term ‘net capital gain’ means “Net capita] gain.” the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.”Pub. L. 94–455 § 1402(d) · 90 Stat. 1520
Inserted · 26 U.S.C. § 1222(11)
Pub. L. 94–455, § 1402(d), inserted sentence at end relating to length of holding period in case of futures transactions in commodities
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 94–455, § 1402(d), inserted sentence at end relating to length of holding period in case of futures transactions in commodities.Enacted provision · exact public law section
(d) Retention of 6-Month Period for Futures Transactions in Commodities.— Section 1222 (relating to other terms relating to 26 USC 1222. capital gains and losses) is amended by adding at the end thereof the following new sentence: “For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section 1402.”Tax Reform Act of 1984
Pub. L. 98–369 div. A title X § 1001(a) · 98 Stat. 494
Substituted · 26 U.S.C. § 1222(1)(4)
Pub. L. 98–369 substituted “6 months” for “1 year”, applicable to property acquired after June 22, 1984, and before Jan. 1, 1988. See Effective Date of 1984 Amendment note below
Source evidence
Code amendment note
Pars. (1) to (4). Pub. L. 98–369 substituted “6 months” for “1 year”, applicable to property acquired after June 22, 1984, and before Jan. 1, 1988. See Effective Date of 1984 Amendment note below.Enacted provision · exact public law section
(a) In General.— (1) Capital gains.— Paragraphs (1) and (3) of section 1222 26 USC 1222. (relating to other terms relating to capital gains and losses) are each amended by striking out “1 year” and inserting in lieu thereof “6 months”. (2) Capital losses.— Paragraphs (2) and (4) of section 1222 are each amended by striking out “1 year” and inserting in lieu thereof “6 months”.Regulated Investment Company Modernization Act of 2010
Pub. L. 111–325 title I § 101(b)(2) · 124 Stat. 3537
Substituted · 26 U.S.C. § 1222(10)
Pub. L. 111–325 substituted “section 1212(a)(1)” for “section 1212”
Source evidence
Code amendment note
Par. (10). Pub. L. 111–325 substituted “section 1212(a)(1)” for “section 1212”.Enacted provision · exact public law section
(2) Paragraph (10) of section 1222 is amended by striking “section 1212” and inserting “section 1212(a)(1)”.Tax Technical Corrections Act of 2014
Pub. L. 113–295 div. A title II § 221(a)(79) · 128 Stat. 4010
Struck · 26 U.S.C. § 1222
Pub. L. 113–295 struck out concluding provisions which read as follows: “For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section 1402.”
Source evidence
Code amendment note
Pub. L. 113–295 struck out concluding provisions which read as follows: “For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section 1402.”Enacted provision · exact public law section
(79) Capital gains and losses.— Section 1222 is amended by striking the last sentence.Effective date note
Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
12 of 13 references resolved to an enrolled provision · 1 partial
Editorial Notes
Amendments1964–2014 · 6 rounds
2014
Pub. L. 113–295 struck out concluding provisions which read as follows: “For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section 1402.”
2010
Par. (10). Pub. L. 111–325 substituted “section 1212(a)(1)” for “section 1212”.
1984
Pars. (1) to (4). Pub. L. 98–369 substituted “6 months” for “1 year”, applicable to property acquired after , and before . See Effective Date of 1984 Amendment note below.
1976
Pars. (1) to (4). Pub. L. 94–455, § 1402(a)(2), provided that “9 months” would be changed to “1 year”.
Pub. L. 94–455, § 1402(a)(1), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.
Par. (9). Pub. L. 94–455, § 1901(a)(136)(A), substituted “Capital gain net income” and “capital gain net income” for “Net capital gain” and “net capital gain” in heading and text.
Par. (11). Pub. L. 94–455, § 1901(a)(136)(B), substituted “Net capital gain” and “net capital gain” for “Net section 1201 gain” and “net section 1201 gain” in heading and text.
Pub. L. 94–455, § 1402(d), inserted sentence at end relating to length of holding period in case of futures transactions in commodities.
1969
Par. (9). Pub. L. 91–172, § 513(c), substituted “The” for “In the case of a corporation, the”.
Par. (11). Pub. L. 91–172, § 511(a), added par. (11).
1964
Pars. (9), (10). Pub. L. 88–272 struck out provisions from par. (9) relating to taxpayers other than corporations, and inserted “In the case of a corporation” in par. (10).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by Pub. L. 113–295 effective , subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
Effective Date of 2010 Amendment
Except as otherwise provided, amendment by Pub. L. 111–325 applicable to net capital losses for taxable years beginning after , see section 101(c) of Pub. L. 111–325, set out as a note under section 1212 of this title.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 applicable to property acquired after , and before , see section 1001(e) of Pub. L. 98–369, set out as a note under section 166 of this title.
Effective Date of 1976 Amendment
Pub. L. 94–455, title XIV, § 1402(a)(1), , 90 Stat. 1731, provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.
Pub. L. 94–455, title XIV, § 1402(a)(2), , 90 Stat. 1731, provided that the amendment made by that section is effective with respect to taxable years beginning after .
Amendment by section 1901(a)(136) of Pub. L. 94–455 applicable with respect to taxable years beginning after , see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1969 Amendment
Amendment by section 511(a) of Pub. L. 91–172 applicable with respect to taxable years beginning after , see section 511(d) of Pub. L. 91–172, set out as an Effective Date note under section 852 of this title.
Amendment by section 513(c) of Pub. L. 91–172 applicable to taxable years beginning after , see section 513(d) of Pub. L. 91–172, set out as a note under section 1211 of this title.
Effective Date of 1964 Amendment
Amendment by Pub. L. 88–272 applicable to taxable years beginning after , see section 230(c) of Pub. L. 88–272, set out as a note under section 1212 of this title.
Credits
1954–2014 · 7 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 322
- 1964Pub. L. 88–272, title II, § 230(b), , 78 Stat. 100
- 1969Pub. L. 91–172, title V, §§ 511(a), 513(c), , 83 Stat. 635, 643
- 1976Pub. L. 94–455, title XIV, § 1402(a)(1), (2), (d), title XIX, § 1901(a)(136), , 90 Stat. 1731, 1733, 1787
- 1984Pub. L. 98–369, div. A, title X, § 1001(a), (e), , 98 Stat. 1011, 1012
- 2010Pub. L. 111–325, title I, § 101(b)(2), , 124 Stat. 3538
- 2014Pub. L. 113–295, div. A, title II, § 221(a)(79), , 128 Stat. 4049.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 322; Pub. L. 88–272, title II, § 230(b), , 78 Stat. 100; Pub. L. 91–172, title V, §§ 511(a), 513(c), , 83 Stat. 635, 643; Pub. L. 94–455, title XIV, § 1402(a)(1), (2), (d), title XIX, § 1901(a)(136), , 90 Stat. 1731, 1733, 1787; Pub. L. 98–369, div. A, title X, § 1001(a), (e), , 98 Stat. 1011, 1012; Pub. L. 111–325, title I, § 101(b)(2), , 124 Stat. 3538; Pub. L. 113–295, div. A, title II, § 221(a)(79), , 128 Stat. 4049.)