816
SEVENTIETH CONGRESS . SESS. I . CII. 852. 1928. INCOME TAX
tion computed without reference to discovery value under section Post, p. 821.
114(b) (2) or to percentage depletion under section 114(b) ni are >a acq ui red before (3) . In addition, if the property was acquired before March 1, 1913, the basis (if other than the fair market value as of March 1, 1913) shall be diminished in the amount of exhaustion, wear and tea r, obs olesce nce, a nd dep letion actual ly sus tained befor e such date, and In case of stock . (3) In the case of stock the basis shall be diminished by the amount of distributions previously made in respect of such stock, to the extent provided under the law applicable to the year in which the distribution was made . From sale, etc., of property .
(c) Amount realized .-The amount realized from the sale or . other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received. On sale or exchange.
(d) Recognition 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 Infra.
determined under the provisions of section 112 . Installment pay- ments taxable. (e ) I nst al lme nt sa les .-Nothing in this sec tion shall be con- strued to prevent (in the case of property sold under contract providing 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 . Gain or loss from SEC. 112 sales exchanges.
. RECOGNITIO N OF GAIN O R LOSS . niE nti rea mou ntr eco g- (a) General rule .-Upon the sale or exchange of property the entire amount of the gain or loss, determined under section 111, shall be re cogniz ed, ex cept a s here inafter provi ded in this sectio n . Exceptions.
(b) Ex change s sole ly in kind .- No gain or loss.
(1) PROPERTY HE LD FOR PR ODU CTIV E USE OR INVESTMENT .-NO On exc han ges for similar uses . 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 pr operty held primar ily for sale, nor s tocks, bo nds, note s, choses in actio n, certif icates o f trust o r benefic ial 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 . For similar stock in
(2) STO CK FOR STOCK OF SAME CORPORATION .-NO gain or loss same corporation . shall be recognized if common stock in a corporation is ex- changed solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely for pre- ferred stock in the same corporation . organization . Stock organization .
(3) STOCK FOR STOCK QN REORGANIZATION .-NO gain or loss shall be recognized if stock or 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 in another corporation a party to the reorganiza- tion . Property for stock of party to reorganization .
(4) SAME-GAIN OF CORPORATION .-NO gain or loss shall be recognized if a corporation a party to a reorganization exchanges property, in pursuance of the plan of reorganization, solely for st ock or secur ities in ano ther c orpora tion a party to the reor- ga nizati on . Transfers for stack of corporation under same
(5) TRANSFER TO CORPORATION CONTROLLED BY TRANSFEROR .-NO control . gain or loss shall be recognized if property is transferred to a co rporat ion by one o r more perso ns sol ely in exchan ge for stock or securities in such corporation, and immediately after the ex- change such person or persons are in control of the corporation ;
�
