> There should be little benefit to holding an asset for longer period to evade taxes. I have friends who regularly end up with losses on trades just so they wo

> There should be little benefit to holding an asset for longer period to evade taxes. I have friends who regularly end up with losses on trades just so they would avoid being "taxed at income" for gains. Without more detail, I'm not entirely sure what you're referring to, but you seem to be conflating two concepts (the tax effects of a long-term capital loss and the tax effects of a short-term investment compared to a long-term investment). IMHO, there absolutely should be a benefit to holding an asset for 12 months (compared to less), as buy-and-hold investing is better for the companies being traded, and reduces volatility in the economy compared to speculative day-trading[0]. > like shorting a futures contract where you own the underlying asset, effectively locking in it's price until past the 12 month mark. This is a strategy that's beyond most casual investors who simply trade mutual funds, sure, but I'm not sure I would classify this as a tax loophole - if so, we'd have to call a normal covered call an "investment loophole". [0] This has nothing to do with high-frequency ("ultra short-term") trading by computers; it's about encouraging long-term vs. short-term investing by individuals.