What is Qualified Replacement Property?
In general, qualified replacement property (QRP) includes stocks and bonds of U.S. corporations, both public and private. QRP includes, for example, common stock, preferred stock, corporate notes and bonds, convertible bonds and floating rate notes. QRP does not include U.S. government municipal securities, foreign securities, mutual funds, limited partnerships or the stock of the corporation (or its affiliates) that is the subject of the ESOP transaction. In addition, brokerage and investment firms offer products that essentially allow the seller to borrow against his QRP to provide further personal liquidity.
