---
kind: "section"
citation: "26 U.S.C. § 1032"
title: "26"
title_heading: "Internal Revenue Code"
number: "1032"
heading: "Exchange of stock for property"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/1032"
units:
  - "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. Exchange of stock for property

- (a) **Nonrecognition of gain or loss—** No gain or loss shall be recognized to a corporation on the receipt of money or other [property](/usc/26/317.md?p=a) in exchange for [stock](/usc/26/1504.md?p=a-4) (including treasury [stock](/usc/26/1504.md?p=a-4)) 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](/usc/26/368.md?p=a-2-F-vii) futures [contract](/usc/26/101.md?p=f-3-A) (as defined in [section 1234B](/usc/26/1234B.md)), to buy or sell its [stock](/usc/26/1504.md?p=a-4) (including treasury [stock](/usc/26/1504.md?p=a-4)).
- (b) **Basis—** For basis of [property](/usc/26/317.md?p=a) acquired by a corporation in certain exchanges for its [stock](/usc/26/1504.md?p=a-4), see section 362.

## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 303; Pub. L. 98–369, div. A, title I, § 57(a), July 18, 1984, 98 Stat. 574; Pub. L. 106–554, § 1(a)(7) [title IV, § 401(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–649.)

## Notes

### 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 sections 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.”