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Title 26, Internal Revenue CodeRelease 119-110

§1058 Transfers of Securities Under Certain Agreements

Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter O — Gain or Loss on Disposition of Property › PART IV — SPECIAL RULES › § 1058

Last updated Sep 22, 2026|Official source

Summary

If you transfer securities under a qualifying agreement, you do not have to report a gain or a loss when you swap those securities for an obligation under the agreement. The same rule applies when you trade your rights under the agreement to get back identical securities. To qualify, the agreement must promise to return identical securities, pay you any interest, dividends, or other distributions you would have received while you did not own them, not change your risk of loss or chance for gain, and follow any extra rules the IRS sets. Any property you get back keeps the same tax basis as what you transferred.

Full Legal Text

Title 26, §1058

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule
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)Agreement requirements
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)Basis
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.

Legislative History

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.

Reference

Citations & Metadata

Citation

26 U.S.C. § 1058

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110