An in-kind contribution refers to the transfer of assets, such as securities, into a fund or investment account – instead buying shares with cash. This type of contribution is common in various investment settings, including exchange funds, where investors contribute shares of stock they own rather than selling their shares for cash to make the investment.
In the context of exchange funds, making an in-kind contribution (and meeting several other requirements) allows participants to exchange a single stock for ownership in a more diversified fund, while deferring taxes.