What term best describes the profit made by an investor after holding a property for less than a year?

Study for the Florida Real Estate License Renewal Test. Prepare with detailed scenarios and multiple choice questions offering explanations. Boost your confidence and ace the exam!

The term "short term gain" accurately reflects the profit realized by an investor who holds a property for less than a year before selling it. In real estate and investment terminology, a gain classified as short term typically involves assets held for one year or less. Such gains are essential for investors as they affect tax liabilities and investment strategies. Profits made during this brief holding period can be subject to different tax rates or consequences compared to long-term gains, which pertain to the property held for longer periods.

The other terms do not correctly capture the nature of profits earned during a short holding period. "Long term gain" implies an investment horizon of more than a year, which does not apply here. "Net gain" is a broader term that could refer to profits from any time frame after accounting for costs, and "immediate profit" suggests instant returns, lacking the specific time frame that short term gain denotes.

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