What are short-term, mid-term, and long-term capital gains?

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When you sell an investment at a profit, the taxes on that profit are calculated at different rates depending on how long youÆve held the investment.

To calculate the holding period for an investment, begin counting on the day you purchased the investment and include the day you sold it. The Taxpayer Relief Act of 1997 established the following guidelines for sales made after July 28, 1997:

• Short-term capital gains If you hold an investment for one year or less and sell it for a profit, capital gains (The profit you get by selling a stock, bond, or mutual fund for more than you paid.) are considered short-term and will be taxable at ordinary income tax rates (currently 15% to 39.6%).
• Mid-term capital gains If you hold an investment for 12 to 18 months, your capital gains are taxed at a maximum rate of 28%. Depending on your income level, your tax rate on the capital gains might be less.
• Long-term capital gains If you hold an investment for more than 18 months and sell it for a profit, your capital gains are considered long-term and are taxed at a maximum rate of 20%.

How do I specify the term for a capital gain in Money?