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26 U.S.C. § 1036 — Stock for stock of same corporation
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** No gain or loss shall be recognized if common stock in a corporation is exchanged solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely for preferred stock in the same corporation.
**(b) Nonqualified preferred stock not treated as stock** For purposes of this section, nonqualified preferred stock (as defined in section 351(g)(2)) shall be treated as property other than stock.
**(c) Cross references**
(1) For rules relating to recognition of gain or loss where an exchange is not solely in kind, see subsections (b) and (c) of section 1031.
(2) For rules relating to the basis of property acquired in an exchange described in subsection (a), see subsection (d) of section 1031.
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Source location: Title 26, Chapter 1, § 1036; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** No gain or loss shall be recognized if common stock in a corporation is exchanged solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely for preferred stock in the same corporation.
**(b) Nonqualified preferred stock not treated as stock** For purposes of this section, nonqualified preferred stock (as defined in section 351(g)(2)) shall be treated as property other than stock.
**(c) Cross references**
(1) For rules relating to recognition of gain or loss where an exchange is not solely in kind, see subsections (b) and (c) of section 1031.
(2) For rules relating to the basis of property acquired in an exchange described in subsection (a), see subsection (d) of section 1031.
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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
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Federal law — U.S. Code and appendices · legal_authorities
Page 2281
TITLE 26—INTERNAL REVENUE CODE
§ 1037
1 See References in Text note below.
Subsec. (a)(4). Pub. L. 109–280, § 844(b)(4), added par.
(4).
Subsec. (b)(2). Pub. L. 109–280, § 844(b)(1), inserted at
end ‘‘For purposes of the preceding sentence, a contract
shall not fail to be treated as an annuity contract sole-
ly because a qualified long-term care insurance con-
tract is a part of or a rider on such contract.’’
Subsec. (b)(3). Pub. L. 109–280, § 844(b)(2), inserted at
end ‘‘For purposes of the preceding sentence, a contract
shall not fail to be treated as a life insurance contract
solely because a qualified long-term care insurance
contract is a part of or a rider on such contract.’’
1997—Subsecs. (c), (d). Pub. L. 105–34 added subsec. (c)
and redesignated former subsec. (c) as (d).
1986—Subsec. (b)(1). Pub. L. 99–514 struck out ‘‘subject
to tax under subchapter L’’ after ‘‘with an insurance
company’’.
1984—Subsec. (b)(1). Pub. L. 98–369, § 224(a), which di-
rected the substitution of ‘‘an insurance company sub-
ject to tax under subchapter L’’ for ‘‘a life insurance
company as defined in section 801’’, was executed by
making such substitution for ‘‘a life insurance com-
pany as defined in section 816’’ to reflect the probable
intent of Congress and the earlier amendment by Pub.
L. 98–369, § 211(b)(15), which substituted ‘‘as defined in
section 816’’ for ‘‘as defined in section 801’’.
Pub. L. 98–369, § 211(b)(15), substituted ‘‘section 816’’
for ‘‘section 801’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Pub. L. 109–280 applicable to contracts
issued after Dec. 31, 1996, but only with respect to tax-
able years beginning after Dec. 31, 2009, and to ex-
changes occurring after Dec. 31, 2009, see
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1036
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