Page:United States Statutes at Large Volume 68A.djvu/343

 CH. 1—NORMAL TAXES AND SURTAXES

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solely for property of a like kind to be held either for productive use in trade or business or for investment. (b) GAIN FROM EXCHANGES N O T SOLELY IN K I N D, — I f an exchange would be within the provisions of subsection (a), of section 1035(a), or of section 1036(a), if it were not for the fact that the property received in exchange consists not only of property permitted by such provisions to be received without the recognition of gain, but also of other property or money, then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property. (c) Loss FROM EXCHANGES N O T SOLELY IN K I N D. — I f an exchange would be within the provisions of subsection (a), of section 1035(a), or of section 1036(a), if it were not for the fact that the property received in exchange consists not only of property permitted by such provisions to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized. (d) BASIS.—If property was acquired on an exchange described in this section, section 1035(a), or section 1036(a), then the basis shall be the same as that of the property exchanged decreased in the amount of any money received by the taxpayer and increased in the amount of gain to the taxpayer that was recognized on such exchange. If the property so acquired consisted in part of the type of property permitted by this section, section 1035(a), or section 1036(a), to be received without the recognition of gain or loss, and in part of other property, the basis provided in this paragraph shall be allocated between the properties (other than money) received, and for the purpose of the allocation there shall be assigned to such other property an amount equivalent to its fair market value at the date of the exchange. For purposes of this section, section 1035(a), and section 1036(a), where as part of the consideration to the taxpayer another party to the exchange assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability, such assumption or acquisition (in the amount of the liability) shall be considered as money received by the taxpayer on the exchange. SEC. 1032. EXCHANGE OF STOCK FOR PROPERTY.

(a) NONRECOGNITION OF G A I N OR Loss.—No gain or loss shall be recognized to a corporation on the receipt of money or other property in exchange for stock (including treasury stock) of such corporation. (b) B A S I S. — For basis of property acquired by a corporation in certain exchanges for its stock, see section 362. SEC. 1033. INVOLUNTARY CONVERSIONS. (a) GENERAL RULE. — I f property (as a result of its destruction in

whole or in part, theft, seizure, or requisition or condemnation or threat or imminence thereof) is compulsorily or involuntarily converted— (1) CONVERSION INTO SIMILAR PROPERTY.—Into property similar

or related in service or use to the property so converted, no gain shall be recognized. (2) CONVERSION

INTO MONEY WHERE

DISPOSITION

OCCURRED

PRIOR TO 1951.—Into money, and the disposition of the converted property occurred before January 1, 1951, no gain shall be recognized § 1033(a)(2)

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