Browse Arkansas Code titles and sections
26-51-412. Gain or loss — Exchange of property.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-412. Gain or loss — Exchange of property.
(a)(1) For the purpose of determining gain or loss, when property is exchanged for other property the property received in exchange shall be treated as the equivalent of cash to the amount of its fair market value if a market exists in which all the property so received can be disposed of at the time of exchange for a reasonable, certain, and definite price in cash.
(2) Otherwise, such exchange shall be considered as a conversion of assets from one (1) form to another, from which no gain or loss shall be deemed to arise.
(b) In the case of the organization of a corporation, the stock received shall be considered to take the place of property transferred for the stock, and no gain or loss shall be deemed to arise from the stock received.
(c) When, in connection with the reorganization, merger, or consolidation of a corporation, a taxpayer receives, in place of stock or securities owned by him or her, new stock or securities, then the basis of computing the gain or loss, if there is any, in a case where the stock or securities owned were acquired before January 1, 1928, shall be the fair market price or value thereof as of that date if such price or value exceeds the original cost, and in all other cases the cost thereof, under rules to be promulgated by the Secretary of the Department of Finance and Administration.
(d) Title 26 U.S.C. §§ 351, 354 — 358, 361, 362, 367, and 368, as in effect on January 1, 2019, regarding corporate organization, reorganization, and recognition of gain, are adopted for the purpose of computing Arkansas income tax liability.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-412
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:26-51-412
Source file: gov.ar.code.title.26.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 1f4d10985df789c400b7602f780152c9f67ee59d6fad0f11b64f5f1ecb521326
Source location: content.xml paragraph 12475
Stored source content
26-51-412. Gain or loss — Exchange of property.
(a)(1) For the purpose of determining gain or loss, when property is exchanged for other property the property received in exchange shall be treated as the equivalent of cash to the amount of its fair market value if a market exists in which all the property so received can be disposed of at the time of exchange for a reasonable, certain, and definite price in cash.
(2) Otherwise, such exchange shall be considered as a conversion of assets from one (1) form to another, from which no gain or loss shall be deemed to arise.
(b) In the case of the organization of a corporation, the stock received shall be considered to take the place of property transferred for the stock, and no gain or loss shall be deemed to arise from the stock received.
(c) When, in connection with the reorganization, merger, or consolidation of a corporation, a taxpayer receives, in place of stock or securities owned by him or her, new stock or securities, then the basis of computing the gain or loss, if there is any, in a case where the stock or securities owned were acquired before January 1, 1928, shall be the fair market price or value thereof as of that date if such price or value exceeds the original cost, and in all other cases the cost thereof, under rules to be promulgated by the Secretary of the Department of Finance and Administration.
(d) Title 26 U.S.C. §§ 351, 354 — 358, 361, 362, 367, and 368, as in effect on January 1, 2019, regarding corporate organization, reorganization, and recognition of gain, are adopted for the purpose of computing Arkansas income tax liability.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation.
**(b) Receipt of property** If subsection (a) would apply to an exchange but for the fact that there is received, in addition to the stock permitted to be received under subsection (a), other property or money, then—
(1) gain (if any) to such recipient shall be recognized, but not in excess of—
(A) the amount of money received, plus
(B) the fair market value of such other property received; and
(2) no loss to such recipient shall be recognized.
**(c) Special rules where distribution to shareholders**
(1) **In general** — In determining control for purposes of this section, the fact that any corporate transferor distributes part or all of the stock in the corporation which it receives in the exchange to its shareholders shall not be taken into account.
(2) **Special rule for section 355** — If the requirements of section 355 (or so much of section 356 as relates to section 355) are met with respect to a distribution described in paragraph (1), then, solely for purposes of determining the tax treatment of the transfers of property to the controlled corporation by the distributing corporation, the fact that the shareholders of the distributing corporation dispose of part or all of the distributed stock, or the fact that the corporation whose stock was distributed issues additional stock, shall not be taken into account in determining control for purposes of this section.
**(d) Services, certain indebtedness, and accrued interest not treated as property** For purposes o
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 351
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 351. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1120
TITLE 26—INTERNAL REVENUE CODE
§ 351
§ 351. Transfer to corporation controlled by
transferor
(a) General rule
No gain or loss shall be recognized if property
is transferred to a corporation by one or more
persons solely in exchange for stock in such cor-
poration and immediately after the exchange
such person or persons are in control (as defined
in section 368(c)) of the corporation.
(b) Receipt of property
If subsection (a) would apply to an exchange
but for the fact that there is received, in addi-
tion to the stock permitted to be received under
subsection (a), other property or money, then—
(1) gain (if any) to such recipient shall be
recognized, but not in excess of—
(A) the amount of money received, plus
(B) the fair market value of such other
property received; and
(2) no loss to such recipient shall be recog-
nized.
(c) Special rules where distribution to share-
holders
(1) In general
In determining control for purposes of this
section, the fact that any corporate transferor
distributes part or all of the stock in the cor-
poration which it receives in the exchange to
its shareholders shall not be taken into ac-
count.
(2) Special rule for section 355
If the requirements of section 355 (or so
much of section 356 as relates to section 355)
are met with respect to a distribution de-
scribed in paragraph (1), then, solely for pur-
poses of determining the tax treatment of the
transfers of property to the controlled cor-
poration by the distributing corporation, the
fact that the shareholders of the distributing
corporation dispose of part or all of the dis-
tributed stock, or the fact that the corpora-
tion whose stock was distributed issues addi-
tional stock, shall not be taken into account
in determining control for purposes
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 351
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 351. This identifies an authority to review, not proof of applicability.