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INCOME TAXES 
portion of any installment payment representing gain or 
profit in the year in which such payment is received. 
Gain or 1058 RECOGNITION OF GAIN OR LOSS FROM SALES AND EXCHANGES 
changes. 
Entire Jmount Sec. 203. (a) Upon the sale or exchange of property 
mi: the entire amount of the gain or loss, determined under 
section 202, shall be recognized. except as hereinafter pro- 
vided in this section. 
Tofino i (b) (1) No gain or loss shall be recognized if property 
imitar uses, ete. held for productive use in trade or business or for in- 
vestment (not including stock in trade or other property 
held primarily for sale, nor stocks, bonds, notes, choses 
in action, certificates of trust or beneficial interest, or 
other securities or evidences of indebtedness or interest) 
is exchanged solely for property of a like kind to be held 
sither for productive use in trade or business or for in- 
vestment, or if common stock in a corporation 1s ex- 
shanged 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. 
(2) 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, ex- 
shanged solely for stock or securities in such corporation 
»r in another corporation a party to the reorganization. 
Wb wok (3) No gain or loss shall be recognized if a corporation 
‘corganization. 9, party to a reorganization exchanges property, in pur- 
suance of the plan of reorganization, solely for stock or 
securities in another .corporation a party to the reor- 
ganization. 
(4) No gain or loss shall be recognized if property 
is transferred to a corporation by one or more persons 
solely in exchange for stock or securities in such corpora- 
tion, and immediately after the exchange such person or 
persons are in control of the corporation; but in the case 
of an exchange by two or more persons this paragraph 
shall apply only if the amount of the stock and securities 
received by each is substantially in proportion to his in- 
terest in the property prior to the exchange. 
oe Involuaty (5) If property (as a result of its destruction in whole 
10 pte Commies or In part, theft or seizure, or an exercise of the power of 
property, ete. pequisition or condemnation, or the threat or imminence 
thereof) is compulsorily or involuntarily converted into 
property similar or related in service or use to the prop- 
erty so converted, or into money which is forthwith in 
good faith, under regulations prescribed by the Commis- 
sioner with the approval of the Secretary, expended in 
the acquisition of other property similar or related in 
service or use to the property so converted, or in the 
acquisition of control of a corporation owning such other 
property, or in the establishment of a replacement fund.