Title 26 — Internal Revenue CodeRelease 119-73

§1036 Stock for stock of same corporation

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter O— - Gain or Loss on Disposition of Property › Part PART III— - COMMON NONTAXABLE EXCHANGES › § 1036

Last updated Apr 6, 2026|Official source

Summary

You don't report any gain or loss when you exchange common stock for common stock of the same corporation, or preferred stock for preferred stock of the same corporation. Nonqualified preferred stock (see section 351(g)(2)) is treated as property, not as stock. Rules for exchanges that include other items are in sections 1031(b) and 1031(c), and rules for the new stock's basis are in section 1031(d).

Full Legal Text

Title 26, §1036

Internal Revenue Code — Source: USLM XML via OLRC

(a)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)For purposes of this section, nonqualified preferred stock (as defined in section 351(g)(2)) shall be treated as property other than stock.

(c)(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.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1997—Subsecs. (b), (c). Pub. L. 105–34 added subsec. (b) and redesignated former subsec. (b) as (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 1997 AmendmentAmendment by Pub. L. 105–34 applicable, with certain exceptions, to transactions after June 8, 1997, see section 1014(f) of Pub. L. 105–34, set out as a note under section 351 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 1036

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73