U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter O— Gain or Loss on Disposition of Property › Part PART IV— SPECIAL RULES

26 U.S.C. § 1058

Transfers of securities under certain agreements

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(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 requirementsIn 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.

(Added Pub. L. 95–345, § 2(d)(1), Aug. 15, 1978, 92 Stat. 482.)Editorial NotesPrior Provisions

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

Statutory Notes and Related SubsidiariesEffective 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.

Notes of Decisions
Cited in 17 cases, 1931–2012 · leading case: Anschutz Co. v. Comm'r, 664 F.3d 313 (10th Cir. 2011).
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Anschutz Co. v. Comm'r, 664 F.3d 313 (10th Cir. 2011). · cites it 3× “26 U.S.C. § 1058 . For the reasons we have already discussed, we conclude that the transactions at issue in this case cannot satisfy the requirements set forth in § 1058(b)(2) or (3).”
Sollberger v. Comm'r, 691 F.3d 1119 (9th Cir. 2012). · cites it 2× “Sollberger also contends that he qualifies for the safe harbor for nonrecognition of gain or loss under 26 U.S.C. § 1058 . We disagree. Section 1058 exempts certain transfers of securities from the capital gains tax so long as the transferor is entitled to receive payments in…”
United States v. James Sutton Regan, Jack Z. Rabinowitz, Steven Barry Smotrich, Charles M. Zarzecki, Paul A. Berkman, & Bruce Lee Newberg, 937 F.2d 823 (2d Cir. 1991). · cites it 2× “In 1978, Congress created a means for making this determination at least in part by enacting section 1058 of the Code, 26 U.S.C. § 1058 . See S.Rep. No. 762, 95th Cong.”
Lizzie W. Calloway v. Comm'r of IRS, 691 F.3d 1315 (11th Cir. 2012). “The Calloways also claim that they fall within the safe harbors provided by 26 U.S.C. § 1058 and Revenue Ruling 57-451 .”
Uncasville Mfg. Co. v. Comm'r of Internal Revenue, 55 F.2d 893 (2d Cir. 1932). · cites it 2× “Chicago Railway Equipment Company, which, however, expressly reserved the point, we think that an analysis of section 278 (26 USCA §§ 1058, 1059 and §§ 1060-1062 notes) as a whole does not admit of any other construction.”
Samueli v. Comm'r, 661 F.3d 399 (9th Cir. 2011). · cites it 2× “ed securities loan with a fixed term of at least 250 days and possibly as long as 450 days, entered into not for the purpose of providing the borrower with access to the lent securities, but instead for the purpose of avoiding taxable income for the lender, qualifies for…”
Myles Salt Co. v. Comm'r of Internal Revenue, 49 F.2d 232 (5th Cir. 1931). “The Board held, three members dissenting, that no lawful return had been filed for the fiscal year in question, and no bar had attached because of section 278 (a) of the Act of 1926 (26 USCA § 1058), “In ease of a false or fraudulent return with intent to evade tax or of a…”
Pac. Coast Steel Co. v. McLaughlin, 61 F.2d 73 (9th Cir. 1932). “Nothing indicates an intention to have it limit the effect • of section 278 (a), 26 USCA § 1058, whieh permits assessment tQ be made or suit to be brought at any time in the case of a false or fraudulent return or a failure to file any return.”
Hanby v. Comm'r of Internal Revenue, 67 F.2d 125 (4th Cir. 1933). “* * * ” Section 278 (a) (26 USCA § 1058) provides: “In the case of a false or fraudulent return with intent to evade tax or of a failure to file a return the tax may be assessed * * * at any time.”
Hoosac Mills Corp. v. Comm'r, 75 F.2d 462 (1st Cir. 1935). “It was further provided in section 277 (b), 26 USCA § 1057 note, in effect, that the period provided in that section, or under section 274 (a), or under section 278 (26 USCA §§ 1058, 1059, 1060 note, 1061 note, 1052), for assessing a tax, should in case of *464 an appeal be…”
United States v. Regan, 726 F. Supp. 447 (S.D.N.Y. 1989). “*451 As they did at trial, defendants undertake a sophistical treatment of 26 U.S.C. § 1058 (1988) to support their unsound position.”
Leighton v. United States, 61 F.2d 530 (9th Cir. 1932). “” (26 USCA § 1058.) Section 278 (dj has already been set forth, supra.”
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