26 U.S.C. § 1036 — Stock for stock of same corporation

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 section 844(g)(1), (2) of Pub. L. 109–280, set out as a note under section 72 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–514 effective, except as oth- erwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 211(b)(5) of Pub. L. 98–369 ap- plicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98–369, set out as an Effective Date note under section 801 of this title. Pub. L. 98–369, div. A, title II, § 224(b), July 18, 1984, 98 Stat. 776, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to all ex- changes whether before, on, or after the date of the en- actment of this Act [July 18, 1984].’’ PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. § 1036. Stock for stock of same corporation (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 corpora- tion. (b) Nonqualified preferred stock not treated as stock For purposes of this section, nonqualified pre- ferred 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 sub- sections (b) and (c) of section 1031. (2) For rules relating to the basis of property ac- quired in an exchange described in subsection (a), see subsection (d) of section 1031. (Aug. 16, 1954, ch. 736, 68A Stat. 309; Pub. L. 105–34, title X, § 1014(e)(3), Aug. 5, 1997, 111 Stat. 921.) Editorial Notes AMENDMENTS 1997—Subsecs. (b), (c). Pub. L. 105–34 added subsec. (b) and redesignated former subsec. (b) as (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–34 applicable, with certain exceptions, to transactions after June 8, 1997, see sec- tion 1014(f) of Pub. L. 105–34, set out as a note under section 351 of this title. § 1037. Certain exchanges of United States obli- gations (a) General rule When so provided by regulations promulgated by the Secretary in connection with the issue of obligations of the United States, no gain or loss shall be recognized on the surrender to the United States of obligations of the United States issued under chapter 31 of title 31 in ex- change solely for other obligations issued under such chapter. (b) Application of original issue discount rules (1) Exchanges involving obligations issued at a discount In any case in which gain has been realized but not recognized because of the provisions of subsection (a) (or so much of section 1031(b) as relates to subsection (a) of this section), to the extent such gain is later recognized by reason of a disposition or redemption of an obligation received in an exchange subject to such provi- sions, the first sentence of section 1271(c)(2) 1 shall apply to such gain as though the obliga- tion disposed of or redeemed were the obliga- tion surrendered to the Government in the ex- change rather than the obligation actually disposed of or redeemed. For purposes of this paragraph and subpart A of part V of sub- chapter P, if the obligation surrendered in the exchange is a nontransferable obligation de- scribed in subsection (a) or (c) of section 454— (A) the aggregate amount considered, with respect to the obligation surrendered, as or- dinary income shall not exceed the dif- ference between the issue price and the stat- ed redemption price which applies at the time of the exchange, and