Firms face increased scrutiny as updated IRS guidance introduces new compliance considerations for ETF conversions under Section 351.
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IRS Issues New Guidance on Multi-Asset Section 351 Exchange Contributions
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IRS Issues New Guidance on Multi-Asset Section 351 Exchange Contributions — What Advisors Need to Know
February 24, 2025
By Michael J. Harrington, JD, CPA
6 min read
The IRS released long-anticipated guidance clarifying the treatment of multi-asset contributions under IRC Section 351, with significant implications for advisors structuring exchange transactions for clients with concentrated equity positions. The new guidance addresses previously ambiguous language in Treasury Reg. §1.351-1 regarding the “control” requirement when multiple transferors contribute diversified asset pools to a single exchange vehicle.
Section 351 Exchange News & Analysis
From IRS guidance updates to new legislation and market-moving trends—the developments that matter for 351 exchange practitioners, all in one place.
The Internal Revenue Service issued Notice 2026-14 clarifying holding period and continuity-of-interest standards that apply when mutual fund portfolios are contributed to newly organized ETF sponsors under Section 351.
A growing number of asset managers are exploring Section 351 transactions as ETF conversions accelerate across the market landscape.
Firms face increased scrutiny as updated IRS guidance introduces new compliance considerations for ETF conversions under Section 351.
A growing number of asset managers are exploring Section 351 transactions as ETF conversions accelerate across the market landscape.
The Internal Revenue Service issued Notice 2026-14 clarifying holding period and continuity-of-interest standards that apply when mutual fund portfolios are contributed to newly organized ETF sponsors under Section 351.
IRS Releases Updated Guidance on Section 351 Continuity-of-Interest Requirements for ETF Conversions
The Internal Revenue Service issued Notice 2026-14 clarifying holding period and continuity-of-interest standards that apply when mutual fund portfolios are contributed to newly organized ETF sponsors under Section 351.
The Internal Revenue Service issued Notice 2026-14 clarifying holding period and continuity-of-interest standards that apply when mutual fund portfolios are contributed to newly organized ETF sponsors under Section 351.
Industry experts weigh in on the growing importance of Section 351 exchanges and how advisors are leveraging them to deliver more tax-efficient investment solutions.
351 Exchange Market Trends
Data-driven insights on 351 exchange volume, issuer activity, and the forces driving market growth. Updated regularly with proprietary analysis.
+42%
351 exchange filings up 42% year-over-year
Q4 2024 vs. Q4 2023 · Proprietary exchange network data
Eight consecutive quarters of double-digit growth confirm that Section 351 exchanges are moving from niche strategy to mainstream practice. Accelerating issuer entry, growing advisor training penetration, and a favorable tax climate are all contributing to what may be the most significant structural shift in the concentrated equity management market in a decade.
Expert Perspectives on the 351 Exchange Landscape
Interviews, commentary, and opinion from the advisors, issuers, and compliance professionals shaping the Section 351 space.
Key Takeaways from Leaders in the Section 351 Space – perspectives 1 –
Insights from industry professionals on trends, risks, and opportunities in exchange structuring.
Key Takeaways from Leaders in the Section 351 Space – perspectives 2
Insights from industry professionals on trends, risks, and opportunities in exchange structuring.
Why Section 351 Exchanges Are Now a Front-Line Tool for Advisor-Led TaxPlanning – perspectives 7
The advisors who are winning clients with concentrated positions aren't waiting for tax law to change. They're using 351 exchanges…
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A Section 351 exchange allows investors to contribute appreciated securities to a fund or ETF in exchange for fund shares without triggering immediate capital gains taxes, helping defer taxes while gaining diversification.