distribution in kind (or an “in-kind” distribution) is a distribution from a company to one or more of its owners in the form of property other than cash, such as securities or business assets. An in-kind distribution may have different tax consequences than a distribution of cash, even if the fair market value of each distribution is the same.

The tax consequences of in-kind distributions are complex and can vary depending on the circumstances of the company and assets being distributed, and companies should consult their tax advisors before doing any in-kind distributions.

In-Kind Distributions