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The scenario is: You own a stock for six months, and then the company issues a stock dividend — the business splits into two entities.

Can you sell both stocks after 6 months and a day after the stock dividend, or do you have to wait another year to get long term capital gain treatment?

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  • Welcome. Please note that tax-related questions require a country to be specified. We use tags for that purpose. I've assumed you are in the U.S. based on your profile and mention of capital gains holding periods. – Chris W. Rea Mar 18 '14 at 2:43
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Stock acquired through a (non-taxable) stock dividend has the same holding period as the stock on which the dividend was paid.

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