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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.