what is in specie 
the phrase in specie is used to describe the transfer of an asset as it is in its current form rather than in its cash equivalent in specie is a latin phrase that is translated to english as in its actual form assets that are commonly transferred in specie are property shares or dividends there are tax benefits to some in specie transactions including favorable tax treatment understanding in specieas noted above the phrase in specie is latin for in its form or in kind the term is commonly used in finance to describe transactions that do not involve the exchange of cash rather an asset is transferred from one party to another in its original form in specie transfers or transactions may involve either physical or financial assets companies or individuals may transfer ownership of land equipment or inventory in their actual forms rather than paying another party in cash in some instances financial assets such as stocks bonds warrants or other securities may be distributed to shareholders in capital return programs for example a company may distribute shares of stock to investors as a dividend when cash is in short supply this particular type of in specie distribution is frequently made in the form of fractional shares for example an investor who owns 100 shares might receive 0 5 or 50 shares distributions that are in specie are usually made when cash isn t readily available or when it s more practical to hand over the asset instead of cash special considerationstax considerations factor into the decision of whether an individual or company should use in specie transfers broadly speaking taxes are collected on cash income and are due only on realized capital gains 1 as such if a company buys another company and pays for the transaction with shares of stock instead of cash the seller does not owe taxes on the gains until those stock shares are sold similarly transferring money from one taxable investment account to another should be done in specie so if you have a certificate of deposit cd that is set to mature and don t want to receive the funds in cash ask your financial institution to reinvest it directly into another cd if you receive the cash proceeds even for a brief time capital gains taxes apply you avoid this with an in specie transfer example of an in specie transferindividual investors generally hold their securities in brokerage accounts or with financial advisors the investor may decide to transfer the assets to another advisor or put the money into another investment such as a trust or an individual retirement account ira the investor can either liquidate the assets to realize the cash or simply transfer the assets to another account the latter is an in specie transfer the in specie option avoids triggering tax consequences taking the cash for however brief a time frame would have obliged the investor to pay capital gains taxes on any appreciation in the investments 