Is the sale of recently purchased stock that was held in a joint account with a now-deceased spouse considered a short-term or long-term sale?

My wife passed away in 2018. After she passed, I sold some stock that was held in a joint account. It was held just a few months, so normally it would be considered a short-term sale. That said, I've read that when you sell inherited stock, it is always considered a long-term sale. I don't think of this as inherited since it was held jointly. Is this sale considered short-term or long-term? Or perhaps half and half?

Your spouse’s holding period becomes your holding period. So, if the security was owned for less than 12 months when it was sold, the gain/loss is short-term. The only change you will realize is a change in basis. You get a step-up in basis to fair market value on your wife’s date of death for half of the shares since they were owned jointly.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Susan D. Jarvis, CPA, is a sole practitioner in Nazareth, Pa.