### Question
How is the term inventory exchange defined?


### Answer
The term **inventory exchange** is defined in *26 U.S.C. § 4662* as the following:

> any exchange in which 2 persons exchange property which is, in the hands of each person, property described in section 1221(a)(1)

#### Citation:
  - *26 U.S.C. § 4662*
  - Heading: **Subtitle D-Miscellaneous Excise Taxes > CHAPTER 38-ENVIRONMENTAL TAXES > Subchapter B-Tax on Certain Chemicals**

