§1058 — Title 26 Internal Revenue Code | U.S. Code

Summary

If you transfer securities under an agreement that follows the rules, you do not have to report a gain or loss when you exchange those securities for an obligation under the agreement, or when you swap the agreement’s rights back for the same securities. The agreement must promise to return identical securities; pay you any interest, dividends, or other payments you would have gotten while the securities were away; not change your chance of loss or gain; and follow any extra rules the Treasury makes. Anything you get in the deal keeps the same tax basis as what you gave.

Title 26, §1058

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of a taxpayer who transfers securities (as defined in section 1236(c)) pursuant to an agreement which meets the requirements of subsection (b), no gain or loss shall be recognized on the exchange of such securities by the taxpayer for an obligation under such agreement, or on the exchange of rights under such agreement by that taxpayer for securities identical to the securities transferred by that taxpayer.

(b)In order to meet the requirements of this subsection, an agreement shall—

(1)provide for the return to the transferor of securities identical to the securities transferred;

(2)require that payments shall be made to the transferor of amounts equivalent to all interest, dividends, and other distributions which the owner of the securities is entitled to receive during the period beginning with the transfer of the securities by the transferor and ending with the transfer of identical securities back to the transferor;

(3)not reduce the risk of loss or opportunity for gain of the transferor of the securities in the securities transferred; and

(4)meet such other requirements as the Secretary may by regulation prescribe.

(c)Property acquired by a taxpayer described in subsection (a), in a transaction described in that subsection, shall have the same basis as the property transferred by that taxpayer.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 1058 was renumbered section 1063 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable with respect to amounts received after Dec. 31, 1976, as payments with respect to securities loans (as defined in section 512(a)(5) of this title), and transfers of securities, under agreements described in this section, occurring after such date, see section 2(e) of Pub. L. 95–345, set out as an

Effective Date

of 1978 Amendment note under section 509 of this title.

§1058 Transfers of securities under certain agreements

Summary

Title 26, §1058

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata