# Section 351 Exchange

> The Market & Regulatory Observer — News, analysis, regulatory updates, opinion pieces, market commentary on the 351 exchange space.


## Posts

- [What Rev. Rul. 2026-20 Means for Section 351 ETF Exchanges](https://section351exchange.com/rev-rul-2026-20-section-351-etf-exchanges/): On September 28, 2026, the IRS released Rev. Rul. 2026-20 alongside Notice 2026-62. The ruling addresses one specific Section 351 ETF pattern. It does not target Section 351 seeding broadly. Here is a full summary of the ruling. The pattern is a planned swap. An investor contributes stock to a new ETF. Shortly after, the fund sends that stock out to an authorized participant (AP) through a Section 852(b)(6) redemption. The IRS treats that as a taxable exchange for the investor. The notice also covers five other fund strategies. I focus here on the 351 ruling, the only piece with a ... Read more
- [What Fund Boards Need to Know About Section 351 ETF Conversions](https://section351exchange.com/fund-boards-351-conversions/): What Fund Boards Need to Know About 351 Conversions Section 351 ETF conversions have moved from niche to mainstream. More advisers now seed new ETFs with appreciated client portfolios on a tax-deferred basis. Every one of those 351 conversions lands in front of a fund board. The tax side gets most of the attention. The securities side is where boards can get caught. The Mutual Fund Directors Forum recently hosted a webinar on this topic with Karen Aspinall and Ray Holst of Practus LLP. It was one of the most practical sessions I have seen for trustees. Together with a recent ... Read more
- [Treasury Scrutiny of Tax-Aware ETF Strategies and What It Means for Section 351 Exchanges](https://section351exchange.com/treasury-scrutiny-of-tax-aware-etf-strategies-and-what-it-means-for-section-351-exchanges/): Treasury and the IRS have put certain tax-aware financial product strategies on notice. A recent Perkins Coie panel moderated by Mohsen Ghazi, with partners Sharon Kim and Vivek Chandrasekhar, walked through what that scrutiny actually covers. The short version is that ordinary ETF activity and ordinary tax loss harvesting are not the target. Stacked structures are. The concern is stacking, not the ETF wrapper The issue Treasury raised at the Wall Street Tax Association panel this summer is the combination of separate code provisions inside a single product structure. Tiered ETFs that redeem out of a lower-tier fund before a dividend ... Read more
- [The Tax Court’s Blueprint: What SIH Partners Means for Section 351 ETF Seeding](https://section351exchange.com/the-tax-courts-blueprint-what-sih-partners-means-for-section-351-etf-seeding/): In the high-stakes world of corporate tax strategy, practitioners often assume that if you follow the literal math of a regulation, you’re safe. The recent Tax Court decision in SIH Partners v. Commissioner proves that while the math matters, the underlying intent matters just as much. The case involved a sophisticated dividend arbitrage transaction. The taxpayer, SIH Partners, perfectly engineered a portfolio swap involving Swiss equities to hit a 64.38% overlap, successfully staying beneath a strict 70% regulatory threshold. When the IRS tried to use a sweeping, common-law “substance-over-form” argument to blow up the trade, the court stopped them cold. The ... Read more
- [Where Treasury Drew the Line on Tax-Aware ETFs](https://section351exchange.com/where-treasury-drew-the-line-on-tax-aware-etfs/): Key takeaways from the Wall Street Tax Association panel with Treasury and IRS officials, July 2026. Treasury and the IRS spent Tuesday morning walking through the tax-aware product strategies they are watching. It was a Wall Street Tax Association seminar with Kevin Salinger and Erika Nijenhuis from Treasury’s Office of Tax Policy, alongside partners from Sullivan & Cromwell, Fried Frank, and KPMG. No rules were announced. The message was that they are paying attention, and they want to talk before they act. Here is what stood out. Treasury is concerned, but not moving yet. Officials said all the tools are on ... Read more
- [The Guardrails That Decide Who Gets to Access the $5.0 Trillion Market](https://section351exchange.com/the-guardrails-that-decide-who-gets-to-access-the-5-0-trillion-market/): ExchangiFi’s new white paper sizes the Section 351 conversion opportunity at an estimated $5.0 trillion. The number gets the attention. The compliance architecture decides who can actually use it. Section 351’s nonrecognition treatment is conditional, and the conditions are unforgiving. The central obstacle is Section 351(e). To stop investors from pooling concentrated stock into instant tax-free diversification, the provision withholds nonrecognition if the receiving entity counts as an investment company. Clearing it requires a diversification test drawn from the RIC rules under Section 368(a)(2)(F). In practice, a contributed basket must satisfy three structural limits at once, plus a control test. Passing ... Read more
- [Section 351 ETF Exchanges: The Complete Legal and Tax Framework](https://section351exchange.com/section-351-etf-exchanges-the-complete-legal-and-tax-framework/): Here is a comprehensive list of the legal authorities, statutes, regulations, rulings, cases, and doctrines that support and govern the legality of a Section 351 exchange of securities into an ETF: Internal Revenue Code (IRC) Statutes The foundation of the tax-deferred conversion relies on specific sections of the IRC governing corporate formations and investment companies: U.S. Treasury Regulations (Tax) Treasury regulations provide the technical mechanics for executing a Section 351 exchange without tripping the investment company restrictions: IRS Administrative Guidance (Rulings and Procedures) The IRS has issued several rulings establishing the boundaries of acceptable Section 351 ETF exchanges: Judicial Doctrines and ... Read more
- [Section 351 Exchange Mistakes to Avoid](https://section351exchange.com/section-351-exchange-mistakes-to-avoid-section-351-exchange/): Most failed Section 351 exchanges do not fail because the strategy is wrong. They fail because of preventable errors that surface late in the process or, worse, after the transaction has closed. The tax authority is well established. The mechanics are well understood. The errors are usually in the execution. This guide walks through the most common mistakes we see in Section 351 ETF exchanges and explains how to prevent each one. Some are tax errors. Some are operational errors. Some are documentation errors. All of them are avoidable with the right preparation. Where the right answer depends on your facts, ... Read more

## Pages

- [Do Not Sell or Share My Personal Information](https://section351exchange.com/do-not-sell-or-share/): Do Not Sell or Share My Personal Information Please complete the form below to submit your request to opt out of the sale or sharing of your personal information.
- [Cookie Policy](https://section351exchange.com/cookie-policy/): This page provides comprehensive information about how we use cookies on our website to enhance your browsing experience, improve website performance, and deliver personalized content. Cookies are small text files that are stored on your device when you visit our site. They help us understand how visitors interact with our website, allowing us to offer a smoother and more efficient user experience. In the table below, you will find detailed information about each type of cookie we use, their purpose, and how long they remain on your device. We are committed to respecting your privacy and providing transparency about the data ... Read more
- [Disclaimers and Disclosures](https://section351exchange.com/disclaimers-disclosures/): Section351Exchange.com Effective Date: May 30, 2025 General Disclaimer Section351Exchange.com is owned and operated by ExchangiFi, LLC, a Delaware limited liability company (“ExchangiFi”). The information on this Site is provided for general informational and educational purposes only. It is intended for use by financial professionals and is not suitable for retail investors or members of the general public. Nothing on this Site should be construed as investment advice, legal advice, tax advice, financial planning advice, or a recommendation of any kind. ExchangiFi is not a registered investment adviser, broker-dealer, statutory underwriter, transfer agent, or law firm. ExchangiFi does not provide personalized advice ... Read more
- [Terms of Service](https://section351exchange.com/terms-of-service/): Terms of Service Section351Exchange.com Effective Date: May 30, 2025 1. Agreement to Terms By accessing or using Section351Exchange.com (the “Site”), you agree to be bound by these Terms of Service (“Terms”). If you do not agree, please discontinue use of the Site. These Terms constitute a binding agreement between you and ExchangiFi, LLC (“ExchangiFi,” “we,” “us,” or “our”), a Delaware limited liability company headquartered in Palm Beach Gardens, Florida. 2. About the Site Section351Exchange.com is an informational website intended for use by financial professionals, including registered investment advisers, wealth managers, broker-dealer representatives, and other qualified financial industry participants. The Site provides ... Read more
- [Home](https://section351exchange.com/): ⎯⎯ The Market & Regulatory Observer for Section 351 351 Exchange News, Regulatory Updates & Market Intelligence Track every IRS ruling, legislative shift, and market trend shaping the Section 351 exchange landscape. Built for advisors, issuers, and compliance professionals who need to know what’s happening—before it impacts their practice. ● LATEST ICI Asks Treasury for Clear Rules on 351 Conversions Start Your 351 Exchange Guide See How a 351 Exchange Works https://section351exchange.com/wp-content/uploads/2026/03/298818_tiny-1.mp4 ●BREAKING TOP STORY ● REGULATORY UPDATE ICI Asks Treasury for Clear Rules on 351 Conversions February 24, 2025 By Matt Bucklin, MBA 6 min read The Investment Company Institute ... Read more
- [Contact Us](https://section351exchange.com/contact-us/): Contact Us Contact our team for general inquiries, support, or partnership opportunities. Our Office & Contact Details Find our direct contact information and office hours below. Info@exchangifi.com +1 (561) 206-2416 2000 PGA Blvd. Palm Beach Gardens, FL 33408 Office Hours Monday – Friday 9:00 am – 6:00 pm Saturday 10:00 am – 2:00 pm Sunday Closed ⎯ FREE CONSULTATION Schedule a 30-Minute Consultation
- [FAQs](https://section351exchange.com/faqs/): Frequently asked questions The following section addresses key questions regarding Section 351 exchanges into ETFs. For further clarification, please contact our team. What is a 351 ETF Conversion? A 351 ETF conversion allows investors to transfer assets into an ETF in exchange for shares without triggering a taxable event. This tax-related mechanism is specifically under U.S. tax law Section 351 of the Internal Revenue Code. Investors can contribute a portfolio of investments and, in return, receive a diversified ETF. Why Convert SMAs to ETFs via Section 351? Investors and advisors should understand why it makes sense to convert separately managed account ... Read more
- [Expert Perspectives](https://section351exchange.com/section-351-perspectives/): Expert Perspectives Interviews, commentary, and opinion from advisors and issuers shaping the Section 351 exchange space.
- [Market Trends](https://section351exchange.com/section-351-market-trends/): Market Trends Data-driven insights on Section 351 exchange volume, issuer activity, and market growth trends today. Latest Releases Estate Planning and the 351 Conversion – Duplicate – [#141] – Duplicate – [#157] Ivanna • March 20, 2026 Lorem ipsum dolor sit amet consectetur. Vitae tortor nulla in adipiscing justo mi blandit… Estate Planning and the 351 Conversion – Duplicate – [#141] – Duplicate – [#157] Ivanna • March 20, 2026 Lorem ipsum dolor sit amet consectetur. Vitae tortor nulla in adipiscing justo mi blandit… Estate Planning and the 351 Conversion – Duplicate – [#141] Ivanna • March 20, 2026 Lorem ipsum ... Read more
- [Regulatory Watch](https://section351exchange.com/section-351-regulations/): Regulatory Watch Follow IRS rulings, Treasury guidance, and compliance shifts affecting Section 351 exchanges closely.
- [ Latest News](https://section351exchange.com/section-351-news/): Latest News The latest Section 351 exchange news, IRS updates, and market developments advisors need to know now. Latest Releases Ropes & Gray Partners Present on In-Kind ETF Seeding: An Introduction to 351 Transactions Matthew Bucklin • July 20, 2026 Asset management partner Jeremy Smith and tax partners Pamela Glazier and Franziska Hertel participated in the June 8 panel discussion, “In-Kind ETF Seeding: An Introduction to 351 Transactions” at the ICI ETF Conference. They discussed key tax and 1940 Act considerations and constraints when seeding ETFs in kind at scale and on a tax-free basis. Ropes & Gray Partners Present on ... Read more
- [Privacy Policy](https://section351exchange.com/privacy-policy/): Section351Exchange.com Effective Date: May 30, 2025 1. Introduction This Privacy Policy describes how ExchangiFi, LLC (“ExchangiFi,” “we,” “us,” or “our”) collects, uses, and handles information in connection with your visit to Section351Exchange.com (the “Site”). We are committed to protecting your privacy and being transparent about our data practices. By using the Site, you agree to the terms of this Privacy Policy. If you do not agree, please discontinue use of the Site. 2. About the Site Section351Exchange.com is an informational website providing general educational content about Section 351 tax-deferred exchange transactions and related topics. The Site does not offer investment advice, ... Read more

## Optional

- [Agent (MCP protocol)](websites-agents.hostinger.com/section351exchange.com/mcp)

[comment]: # (Generated by Hostinger Tools Plugin)