ToddL99
Expert Alumni

Get your taxes done using TurboTax

You do not need to report a "debt - equity swap" transaction on your tax return. This was a 'purchase' on your part and the purchase of securities is not a taxable event. 

 

You will need to report the sale of those securities in the year they are sold, and will calculate the profit (loss) using the value of the debt you "swapped" for those equity securities.