Page:United States Statutes at Large Volume 49 Part 1.djvu/1723

 1678 Rate of tax. Ante, p.1655. Oil or gas properties. Tax on sales . Ante, p. 1653. Oomputation of net income. Gain or loss. Computation of. Post, p. 1685. Adjusted basis. Amount rea lized. Recognition of gain or loss. Installment sale s. Gain or loss from sales or exchanges. Ent ire amount re c- ognized ; exceptions. Exchanges solely in kind. Property held for productive use or in- ves tment. Stock for stock of same corporation. 74T H CONGRESS. SESS,. II. C H. 690. JU NE 22, 1936 . (b) RATE OF TAX.-Banks shall be taxable in the same manner as other corporations, except that they shall not be subject to the sur- tax imposed by section 14, and except that the normal tax imposed by section 13 shall be at the rate of 15 per centum instead of at the rates provided in such section. SEC. 105. SALE OF OIL OR GAS PROPERTIES. In the case of a bona fide sale of any oil or gas property, or any interest therein, where the principal value of the property has been demons trate d by p rospe cting or ex plorat ion o r disc overy work done by the taxpay er, the portion of the tax impos ed by section 12 attribut- able to such sale shall not exceed 30 per centum of the selling price of such property or interest. Supplement B-Computation of Net Income [Supplementary to Subti tle R, Part II] SEC. 111. DE TER MINA TIO N OF AMOUNT OF, AND RECOGNITION OF, GAIN OR LOSS. (a) COMPUTATION OF GAIN OR Loss.-The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 113 (b) for d eterm ining gain, and the loss shall be t he ex cess of th e adj usted basis provided in such section for determining loss over the amount realized. (b) AMOUNT REALIZED .-The amount realize d from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the proper ty (other than money) received. (c) R ECOGNI TION 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 pro- viding for payment in installments) the taxation of that portion of any installment payment representing 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 entir e amo unt o f the gain or l oss, deter mined unde r sec tion 111, shall be recognized, except as hereinafter provided in this section. (b) EXCHANGES SOLELY IN KIND .- (1) PROPERTY HELD FOR PRODUCTIVE 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 other property held primarily for sale, nor stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest) is exchanged 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 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 cor poration.