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Title 26, Internal Revenue CodeRelease 119-110

§1032 Exchange of Stock for Property

Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter O — Gain or Loss on Disposition of Property › PART III — COMMON NONTAXABLE EXCHANGES › § 1032

Last updated Sep 22, 2026|Official source

Summary

A corporation does not have to count or report a gain or loss when it gets money or other property in exchange for its own stock, including treasury stock. The same rule applies when an option to buy or sell the corporation’s stock is acquired or expires, or when a securities futures contract to buy or sell its stock is involved (see section 1234B). Rules about the tax value (called the basis) of property the corporation receives are in section 362.

Full Legal Text

Title 26, §1032

Internal Revenue Code, Source: USLM XML via OLRC

(a)Nonrecognition of gain 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. No gain or loss shall be recognized by a corporation with respect to any lapse or acquisition of an option, or with respect to a securities futures contract (as defined in section 1234B), to buy or sell its stock (including treasury stock).
(b)Basis
For basis of property acquired by a corporation in certain exchanges for its stock, see section 362.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2000—Subsec. (a). Pub. L. 106–554 inserted “, or with respect to a securities futures contract (as defined in section 1234B),” after “an option” in second sentence. 1984—Subsec. (a). Pub. L. 98–369 inserted provision that no gain or loss shall be recognized by a corporation with respect to any lapse or acquisition of an option to buy or sell its stock (including treasury stock).

Statutory Notes and Related Subsidiaries

Effective Date

of 2000 Amendment Pub. L. 106–554, § 1(a)(7) [title IV, § 401(j)], Dec. 21, 2000, 114 Stat. 2763, 2763A–651, provided that: “The

Amendments

made by this section [enacting section 1234B of this title and amending this section and section 1091, 1092, 1223, 1233, 1234A, 1256 and 7701 of this title] shall take effect on the date of the enactment of this Act [Dec. 21, 2000].”

Effective Date

of 1984 Amendment Pub. L. 98–369, div. A, title I, § 57(b),
July 18, 1984, 1984, 98 Stat. 574, provided that: “The amendment made by subsection (a) [amending this section] shall apply to options acquired or lapsed after the date of the enactment of this Act [
July 18, 1984] in taxable years ending after such date.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 1032

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110