Page:United States Statutes at Large Volume 47 Part 1.djvu/220

 196 INCOME TAX Adjusted basis. Poat, p. 201. Computation o f s um s from disposition of property. Recognition of ga in or loss on sale or ex. change. Installment sales taxable. Ga in or loss fr om sales on exchanges. Entire amount rec- ognized. Exceptions. No gain or loss on ex- changing for similar uses. Similar stock in same corporation. Substituted stock on reorganization. Property for stock of party to reorganize. tion. Transfers for stock of corporation under same control. Limitation. Gain from exchan ges not solely in kind. Receipts additio nal to that on which none recognized. 72d CONGRESS. SESS. I. CH. 209 . JUNE 6, 1932 . property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 113(b), and the loss shall be the excess of such ba sis over the amount realized. (b) AMO UNT RE ALI ZED .-T he amount realized fr om the sa le or other di spositi on of p roperty shall be the sum of any money received plus the fair market value of the property (other than monereceived. (C) RE COGNITI ON OF GAIN OR Loss.-In the case of a sale or exchange, the extent to which the gain or loss determined under this section shall be recognized for the purposes of this title, shall be determined under the provisions of section 112 . (d) INSTALLMENT SALEs.-Nothing in this section shall be con- strued to prevent (in the case of property sold under contract provid- ing for payment in installments) the taxation of that portion of any installment payment r epresenting gain or -profit in the year in which such payment is received . SEC. 112 . RECOGNITION OF GAIN OR LOSS . (a) GENERAL RULE .-Upon the sale or exchange of property the entire amount of the gain or loss, determined under section 111, shall be recognized, except as hereinafter provided in this section . (b) EXCHANGES SOLELY IN KIND.- (1) PR OPE RTY H ELD FOR PRO DUO Pn VE USE OR INVESTMENT.-NO gain or loss shall be recognized if property held for productive use in trade or business or for investment (not including stock in trade or ot her property held pr imarily for sale, no r stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest) is ex- changed solely for property of a like kind to be held either for productive use in trade or business or for investment . (2) STOCK FOR STOCK OF SAME CORPORATION .-No ga in or l oss 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 . (3) STOCK FOR STOCK ON REORGANIZATION.-No gain or loss shall be recognized if stock or securities in a corporation a party to a reo rgan izat ion are, in p ursu ance of the p lan of r eorg aniz ation, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization . (4) SAME-GAIN OF CORPORATION .-No gain or loss shall be rec- ognized if a corporation a party to a reorganization exchanges property, in pursuance of the plan of reorganization, solely for stock or secur ities in another cor poration a party to the reorgani- zation. (5) TRA NSFER TO CO RPORAT ION C ONTRO LLED BY TRANSFEROR .-No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation, and immediately after the exchange such person or persons are in control of the corporation ; but in the case of an exchange by two or more persons this para- graph shall apply only if the amount of the stock and securities received by each is substantially in proportion to his interest in the property prior to the exchange. (c) GAIN F ROM EXC HANGES NOT SOLELY IN KIND.- (1) If an exchange would be within the provisions of subsection (b) (1), (2), (3), or (5) of this section if it were not for the fact that the property received in exchange consists not only of property permitted by such paragraph to be received without the recognition of gain, but also of other property or money, then