Long Term Gain Meaning & Definition

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Definition of Long Term Gain

Long Term Gain is a profit realized through the sale of a security at a price that is higher than its purchase price after a being held for more than 12 months.

Applying "Long Term Gain" to Securities Exams:

If a customer buys a security and sells it for a profit after owning it at least one year he has realized a long term capital gain. It is important to note that the tax consequence for a long term gain may be different than for a short term gain, in that the tax rate may be lower than if the customer sold within the first 12 months of ownership.