This is taxed at the ordinary income tax rate.
When an investor sells a qualified investment before holding it for a full 12 months, it results in a Short-term Capital Gain or Loss. This type of gain or loss is subject to taxation at the ordinary income tax rate. It is important to keep track of the holding period of investments in order to accurately calculate any potential short-term capital gains or losses. As always, it is recommended to consult a tax professional for specific advice related to your individual situation.