Title 26 — Internal Revenue CodeRelease 119-73not60
§1036 Stock for Stock of Same Corporation
Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter O— Gain or Loss on Disposition of Property › Part III— COMMON NONTAXABLE EXCHANGES › § 1036
Summary
Don't report a gain or loss when common stock is swapped only for common stock, or preferred only for preferred, of the same corporation. Nonqualified preferred stock (see section 351(g)(2)) is treated as property. If other property is involved, see section 1031 (subsecs. (b),(c) for reporting rules; (d) for basis).
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 5, 2026
Release point: 119-73not60