### Question
Can you define what covered security means?


### Answer
**Covered security** is defined as the following in *26 U.S.C. § 6045*:

> any specified security acquired on or after the applicable date if such security—



(i) was acquired through a transaction in the account in which such security is held, or



(ii) was transferred to such account from an account in which such security was a covered security, but only if the broker received a statement under section 6045A with respect to the transfer

#### Citation:
  - *26 U.S.C. § 6045*
  - Heading: **Subtitle F-Procedure and Administration > CHAPTER 61-INFORMATION AND RETURNS > Subchapter A-Returns and Records > PART III-INFORMATION RETURNS > Subpart B-Information Concerning Transactions With Other Persons**

