A common way to pay people is by the use of cash, but that isn’t the only way. Another alternative payment is in-kind distribution, which is when payment is made through mediums like physical goods or securities. These types of distributions can be used in a myriad of settings such as between corporations and investors or in venture capital and private equity fields. How Distributions In-Kind Work In-kind distributions can happen between companies, between a business and shareholders, or between loved ones. A company may decide to do an in-kind transfer because they want to retain cash for other purposes. It may also be more tax-efficient to transfer non-cash assets as opposed to paying in cash. For instance, a company choosing to use an in-kind distribution instead of cash can curb capital gains taxe son assets that have appreciated in value. Types of Distribution In-Kind There are various types of in-kind distributions and each has a different financial implication. Three common types include securities, real estate and inheritance. Stock dividends A common type of distribution in kind is stock dividends. Stock dividends are essentially payments