inspecie

In specie, commonly written as in specie, is a Latin phrase used in law and finance to denote a transaction, payment, or distribution of assets in their actual form rather than in cash. The expression derives from Latin and translates roughly as “in kind.” Historically, it was associated with payments made in coin rather than paper money.

In financial and corporate contexts, an in specie distribution occurs when a fund, company, or estate transfers assets such as securities, real property, or other non-cash assets to shareholders, beneficiaries, or creditors instead of cash. This can preserve the asset mix and avoid liquidation costs, but it may require valuation, tax basis adjustments, and consideration of transfer taxes or fees.

In estate planning, an estate may settle with in-kind distributions to heirs, delivering specific assets rather than cash payments. Mergers, acquisitions, and certain reorganizations can involve in specie exchanges or transfers where asset bundles are swapped without a cash sale, affecting valuation and tax treatment for involved parties.

Tax and accounting implications of in specie transactions vary by jurisdiction. They commonly involve fair market value determinations, potential capital gains recognition, and liquidity considerations for recipients. Proper documentation and valuations are essential to ensure compliance with regulatory and tax requirements.

See also: in-kind distribution, in-kind donation, in-kind exchange.