Is the US tax rate is less severe if you've held the stock at least two years prior to selling it at a profit?

Question

I bought EXM (Excel Maritime) on the NYSE at $13/share around Nov 2005 and it's at $59/share. I had heard somewhere that the capital gains tax is less if you hold on to a stock for more than two years prior to selling it at a profit and just wanted to find out if this is true because I'd hold off on selling for another month or two if this is the case. Thanks in advance for any pertinent and knowledgeable responses.

Answer 1

Long-term capital gains begin when you've held a stock for more than 1 year, short-term is when you've held a stock for less than 1 year. Inherited stock is always treated as long-term no matter how short or long you've held it. Short-term gains are taxed at your regular tax bracket. Long-term gains are taxed at maximum rate of 15%, and for those in the 10% or 15%brackets the long-term gains tax rate is 5% (the 5% rate changes to 0% for 2008). You've already held it for the long-term holding period, so you can sell it at any time you want to right now.

Answer 2

The long term capital gains rates kick in if you've held a stock for at least a year and a day. anything less than that is short-term and you don't get the favorable rates. There's no additional reduction for holding it longer. So sell it whenever you want to - you're already into the long-term rates.