Public conceptIncome character
Short-term versus long-term gain
The holding-period distinction that routes net gains into different rate systems.
In one sentence
Short-term gains enter the ordinary lane while eligible long-term gains enter the preferential lane.
Model
holding period + gain rules → short-term or long-term character
Worked example
A net gain from an asset held one year or less is generally short-term; a qualifying gain held longer is generally long-term.
What to notice
Follow this mechanism in a related lesson, where the same calculator engine exposes every intermediate value.
Common misconception
The calculator expects already-netted gain amounts; it does not perform transaction-level Schedule D netting.
See it in motion