Conversion Transaction

Conversion Transaction means:
an effort by a taxpayer to convert ordinary income to.

capital gain. Often the taxpayer takes offsetting positions in similar properties in an effort to realize capital gain and an equal amount of ordinary loss. For conversion transactions after April 30, 1993, the gain is recharacterized as ordinary income. Former IRC (check if this IRC provision is current here) §1258.

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.