§1036 — Stock for stock of same corporation

6 cases·2 followed·1 distinguished·3 cited—33% support

Statute Text — 26 U.S.C. §1036

(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.

Treasury Regulations

Treas. Reg. §Treas. Reg. §1.1036-1 Stock for stock of the same corporation
Treas. Reg. §Treas. Reg. §1.1036-1(a) Section 1036 permits the exchange, without the recognition of gain or loss, of common stock for common stock, or of preferred stock for preferred stock, in the same corporation.
Treas. Reg. §Treas. Reg. §1.1036-1(b) For rules relating to recognition of gain or loss where an exchange is not wholly in kind, see subsections (b) and (c) of section 1031.
Treas. Reg. §Treas. Reg. §1.1036-1(c) A transfer is not within the provisions of section 1036(a) if as part of the consideration the other party to the exchange assumes a liability of the taxpayer (or if the property transferred is subject to a liability), but the transfer, if otherwise qualified, will be within the provisions of section 1031(b).
Treas. Reg. §Treas. Reg. §1.1036-1(d) Nonqualified preferred stock.

6 Citing Cases

FOLLOWED Lizzie W. & Albert L. Calloway, Petitioner 135 T.C. No. 3 · 2010

Section 1036 provides for nonrecognition if .common stock.

Calloway v. Commissioner 135 T.C. 26 · 2010

Petitioners urge this comparison because the revenue ruling concludes that there is no taxable disposition of stock unless and until the broker satisfies his obligation to the stockholder by delivering property that does not meet the requirements of section 1036. Section 1036 provides for nonrecognition if common stock in a corporation is exchanged solely for common stock in the same corporation. Id., 1957-2 C.B. at 298. By analogy, petitioner seems to argue that his IBM stock was not disposed o

Sherwood Properties, Inc. v. Commissioner 89 T.C. 651 · 1987

Kast v. Commissioner 78 T.C. 1154 · 1982

Estate of Meyer v. Commissioner 58 T.C. 311 · 1972

Carpenter v. Commissioner 10 T.C. 64 · 1948