Those held for one year or less are considered short-term and receive no preferred tax treatment. For a print version, please purchase a copy of this book. After 2010, dividends will be taxed at the taxpayer's ordinary income tax rate, regardless of his or her tax bracket. This is done to encourage entrepreneurship and investment in the economy. Also see the government spending diagram for some context on taxes, deficits, and interest rates. Most people can get a significant advantage from holding stock investments for more than one year. Many other capital investment home, buildings, real estate, bank deposits are considered long term if the holding period is 3 or more years. Exchange which have been officially declared of negligible value.