What Is Date Acquired for Tax Purposes?

The “date acquired” is the specific calendar date when you officially take ownership of an asset. This date’s primary function relates to taxation, as it is the starting point for determining how long you have owned a piece of property. This holding period is a fundamental component in the calculation of capital gains or losses, which arise when you eventually sell the asset.

The Role of the Acquisition Date in Capital Gains

The date you acquire an asset marks the beginning of what is known as the holding period. This period, which the IRS defines as starting the day after you acquire the asset and ending on the day you sell it, dictates the tax treatment of any resulting profit or loss. The length of this period determines whether your capital gain or loss is classified as short-term or long-term, a distinction with significant financial consequences.

If you own an asset for one year or less, the transaction results in a short-term capital gain or loss. Short-term gains are taxed at your ordinary income tax rates, which can range from 10% to 37% depending on your income level and filing status. This means the profit from the sale is taxed in the same manner as your regular wages or salary.

Conversely, holding an asset for more than one year qualifies the transaction for long-term capital gain or loss treatment. Long-term capital gains are subject to preferential tax rates, which are lower than ordinary income rates. For most taxpayers, these rates are 0%, 15%, or 20%, offering a substantial tax advantage.

Finding the Date Acquired for Securities

For investors in stocks, bonds, or mutual funds, the acquisition date is the “trade date,” the day your order to buy the security is executed on the market. It is not the “settlement date,” which is typically one or two business days later when the cash and security officially change hands. This distinction is important for accurately calculating the holding period.

Many investors acquire shares of the same security at different times, leading to multiple acquisition dates. This often occurs through dividend reinvestment plans (DRIPs), where company dividends are used to automatically purchase more shares, or by making several separate purchases over time.

This information is available on documents provided by your brokerage firm. Your monthly or quarterly brokerage statements will list individual purchase transactions with their corresponding trade dates. Furthermore, when you sell a security, your broker will issue a Consolidated Form 1099-B, which explicitly reports the acquisition date for the specific shares sold.

Finding the Date Acquired for Real Property

Determining the acquisition date for real estate is generally more straightforward than for securities. For a property you purchase, the date acquired is almost always the closing date. This is the date when the legal ownership, or title, of the property is officially transferred from the seller to you.

To find this specific date, you should refer to the legal documents associated with the property purchase. The closing disclosure, settlement statement, or deed are the primary sources for this information.

Determining the Date for Special Acquisitions

The rules for determining the acquisition date change for assets you did not directly purchase, such as those received through an inheritance or as a gift. When you inherit an asset, like a stock or a house, the acquisition date is considered to be the date of the previous owner’s death. A unique tax rule applies here: all inherited property is automatically treated as a long-term holding, meaning any gain will be taxed at the more favorable long-term capital gains rates.

The treatment of gifted property is different. If you receive an asset as a gift, you also inherit the original owner’s acquisition date. This means your holding period starts on the date the person who gave you the gift originally purchased the asset, a concept known as a “carryover” holding period.