,l§934 * rzrzzn 26.-QINTEJ (c) The amount realized from the sale or other disposition of iproperw shall be the sum of any money received plus the fair imarket value of the property (other than money) `rccoived, l ·· (d) In the case of a sa1o·or_exchango, the extent to which ,tho gain or lo$ determined under this éhall be recog- Q rained- for the purposes of this title, ohall be determined under `
- the provisions of section “ ·o _ ‘ - _ » _ ‘
·, (o)` Nothing in this isectioh shall be construed to prevent (in the mw of property sold 'under contract providing foizpay- l _ ment in insml1monto):the taxation of that portion of any installment payment representing gain or proiit in the · year°ln_ whichasnoh payment is rocoivedr (Feb. 26, 1926, c. 27, 5.202, ` 44 Stat, 11.) .— __ A v ‘ z See note at beginning of this chapter, _ .. u Sections 203 and 2364 to are cet. out in QQ 934 ‘ and 935, respectively, of this supplemental title, ‘f This Act," herein referred to xreecrorm throughout this supplemental·tit1o._ U — · 934. Gains or not recognized.-——(a)—Upon the sale; or a exchange of property the entire arnount- of the gain · or loss, u determined nnder Section 202,5 shall be recognized, except as hereinafter. provided lnthislxction. " _— e » · - (b): {1) No @in or loss belrccognized if property held for productive use in trade or business or for 'investroont (not including stock in trade or other property held primarily for sale, nor stocks, bonds,` notes, chosen in action, certlilcates oftrnat or benedcial interest, or other securities or evidences of _ pindebtednesa or interest) is exchanged solely ‘ for property of _ n, like kindrto be held either for productive use in trade or business or for investment, or it common stock ln a corporation is exchanged solely tor- oommoxrstock in the same corporation, , or if preferred {stock in a corporation is exchanged solely for preferred stock in the wma corporation. ‘ ‘ ~ ` .(2) No gain or loss shall be recognized if stock`0r securities ~ ‘ in a corporation a party to a reorganization are in pursuance of the plan of reorganization), exchanged solely for stock. or securities in such corporation or °i.¤~ another corporation a wrty to the reorganization. . _ ·. · _— -· - ‘ I ° · (3) No gain or Ions ahall be recognized if acorporation a. party to a reorganization exchanges .property, ln pursuance ot the plan ot1.reorganization,‘ solely for stock or securities in another corporation a party to the reorganization. ‘ · ~ _ _ (4) No gain or loss shall he recognized if property is trannferred to a corporation by one or more persona solely in exchange for stock or securities in ouch corporation, and imxne- o diately after the exchange auch person or persons are in control of the corporation; but ine cherokee ot an. exchange by two or ¥· n1ore.p€l‘S¤ns this paragraph shall apply only , lf the amount of the stock and aecnritieo, received by. meh is aubmantially in proportion to his interest in the property prior to the exchange. » ` (5) If property (as a result of its dhotruction invihole or in part, theft or seizure, or an exercise ot the power of requisition ‘ or condemnation, or the threat, or imminouco thereof) is compnloorily or involuntarily converted into property similar or , related in oervicej or noe to the property nooconvortod, or into; money which io forthwith in iaith, under regulations prescribed by the coznmlmioner with the approval or the Score-· tary, expended in the acquisition ot other property élmilar or , rolatedln service or one to theproperty so converted, ofln the i acquisition ot control of a corporation owning anch other prop· · erty, or in the eotabllohment, ot a replacement fund, no gain orlooo shall be recognized. litany portof the money ja not so ll expended, the gain, it any, shall be recognized, but in an amount not in excess oi the money which ia not m expended. _. · (c') It there io dintrlbnted, in pnronanco of aplan ot reor-· _ ganization, to a ahareholdc·r in a corporation a party to the - ‘ reorganization, stock or securities in auch corporation or pin . another corporation an party to the reorganization, without the ‘ surrender by_ our-h. shareholder ofotock or securities in auch
EZNAL REVENUE 1976 a corporation, no gain to the distrlbotee from the receipt gf such stock or secorities shall be recognized. it . _ - ;~ _(d) (1) If an exchange would be within the provisions of paragraph _(1),»_ (2), or (4) ofsubdirieion (b) if.it were-not for the fact that the property- rccelveol in exchange consists not only or property permitted by such _ paragraph to he ro. eeiyed without the recognition of gain, bot also of other prop. erty or money, then the gain; ii any, to the recipient ‘Sh&I1 be l 1'€¢0; ¢ zed, bat in on arnountlnot in excess of the Sum of such ' money engl the {air znarket value of-· such other property. . (2) It a {distribution made in pursuance of wa plan Qrof reorganization is within the provisions of paragraph" (.1) but has the eiect ot the distribution r of a taxable divieierid, time there shall be taxed as a dividend to each dtstribntec oooh an amount of the gain recognized under paragraph (1) aeienot io excess of his, ratable share of the tinoistributed earning aml proQs of the corporation accumulated after February 28, 1913. The remainder, if guy, of the gain recognized antler porepepn ‘(1) shall be taxed as a gain from the exchange of property. (e) if an exchange wonlcl be within the provisions ot paragraph (3) ofisubdivi.éjon`_(b) ifjt were not for the feet that the property 1feceived"in exchange consists not only. of stock or securities permitted by such rmragraph to be received withlg out the recognition-of gain, but also of other property or (money, then- - . . 1 ·` ‘ _ _ (1)_ I£ the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization,. no `gain to the corporation shall be recog·nized from the cx-, _ch£mge,buc·- — . t ~ (2) If ‘ tit; <;orporation_ receiving such other property or money does. not distribute ‘it in pursuance of the plan of ·roor*— goni”zationQ theigain, if any, to the corporation shall be recogy niied, but in an amount not in excess of the earn of each money and the -fai1·° market value of such other property so received, which is"not-eo distributed. l ‘ . o" (f)‘?If an exchange would be within the provisions of pero? graph: (1), (·2), .(3),~ or (4) lot subdivision (h) it it were not tor the fact that the Property received ‘in exchange ‘coosi>=te not onl_j•—·of property permitted by such paragraph to be received _ withoutthe recognition ot-gaioor looe§Z`bnt also ot other property or money, then no Looe from the exchange shall be recog- ¤iz€d·’° L•·‘ [ (g) The dfstrlbixtion, in pursuance of a plan of mrrga1i'a:t· tion, by cron behalf of a corporation a party to the reorganize- l- tion, of its stock or securities orletock or securities in a corporation a party to the reorganieation, shall not be coneldereel a distribution of earnings og pronto within the meaning of eeb—~ division (b)_ of section 2011for the purpose of determining the tnxability of subsequent distributions by the corporation. ` (h) Ao used in this section and ,eectione~)20ra,nd’ 264-- _ . _ (1) The term." reorganization " means ·(A) a merger or coo ° eolidation (including the acquisition by one corporation ot at least a majority ot the voting stock and at i@st a majority of the total number of shares . of all other claeeee of- stock of another corporation, or eohetantlally all the properties ot another corporation), or (B.) a transfer by e corporation of all or a nart ot its aeoete to another corporation it immediately after. the transfer the traoeteror or its stockholders or both are in control ot the cerporetloo to tvhlchthe aeeete aretrans; ferred, or (C) a recapttallzanon, or _ (D)- at more change in identity, form, or place of organ ization,_ however eRected.` f (2) The term "a party to a reorganization " includes acorporation resulting from a reormntzation and, includes both corporations in the case ofan acquisition by one corporation or et least a _ majority of the voting stock and at least a majority of the totafnnmber of shores of ‘all· other clasoeeot stock ot another corporation. ‘ . - V ° ‘· (Q) As need in this section the term "`control " means th? ownership of at least S0 per centmn of the voting stock; vand
