Nonrecognition of Gain or Loss From Exchanges Solely in Kind -- No gain or loss
shall be recognized if property held for productive use in trade or business or
for investment (not including stock in trade or other property held primarily
for sale, nor stocks, bonds, notes, chooses 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 either for
productive use in trade or business or for investment.
Gain From Exchanges Not Solely in Kind -- If an exchange would be within the
provision of subsection (a), of section 1035 (a), of section 1036 (a), or of
section 1037 (a), if it were not for the fact that the property received in
exchange consists not only of property permitted by such provisions to be
received without the recognition of gain, but also of other property or money,
then the gain, if any, to the recipient shall be recognized, but in an amount
not in excess of the sum of such money and the fair market value of such other
property.
Loss From Exchanges Not Solely in Kind -- If an exchange would be within the
provisions of the subsection (a), of section 1035(a), of section 1036(a), or of
section 1037(a), if it were not for the fact that the property received in
exchange consists not only of property permitted by such provisions to be
received without the recognition of gain or loss, but also of other property or
money, then no loss from the exchange shall be recognized.
Basis-- If property was acquired on an exchange described in this section,
section 1035(a), section 1036(a), or of section 1037(a), then the basis shall
be the same as that of the property exchanged, decreased in the amount of any
money received by the taxpayer and increased in the amount of gain or decreased
in the amount of loss to the taxpayer that was recognized on such exchange.
