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

Summary

When someone transfers securities under an agreement that meets certain rules, they do not have to report a tax gain or loss when those securities are exchanged for an obligation under the agreement, or when rights under the agreement are exchanged back for identical securities. Property received in such a deal keeps the same tax basis as the property given up. The agreement must return identical securities to the transferor, pay the transferor amounts equal to all interest, dividends, and other distributions the owner would receive while the securities are away, not reduce the transferor’s risk of loss or chance for gain, and follow any other rules the Secretary sets. Securities — the investments defined in section 1236(c).

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