### Question
What is the definition of asset exchange or conversion transaction?


### Answer
The definition of **asset exchange or conversion transaction** is as follows in *26 U.S.C. § 501*:

> any voluntary exchange or involuntary conversion of any property related to generating, transmitting, distributing, or selling electric energy by a mutual or cooperative electric company, the gain from which qualifies for deferred recognition under section 1031 or 1033, but only if the replacement property acquired by such company pursuant to such section constitutes property which is used, or to be used, for—


(i) generating, transmitting, distributing, or selling electric energy, or


(ii) producing, transmitting, distributing, or selling natural gas

#### Citation:
  - *26 U.S.C. § 501*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter F-Exempt Organizations > PART I-GENERAL RULE**

