---
kind: "section"
citation: "26 U.S.C. § 1036"
title: "26"
title_heading: "Internal Revenue Code"
number: "1036"
heading: "Stock for stock of same corporation"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/1036"
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"
---

# §1036. Stock for stock of same corporation

- (a) **General rule—** No gain or loss shall be recognized if common [stock](/usc/26/1504.md?p=a-4) in a corporation is exchanged solely for common [stock](/usc/26/1504.md?p=a-4) in the same corporation, or if preferred [stock](/usc/26/1504.md?p=a-4) in a corporation is exchanged solely for preferred [stock](/usc/26/1504.md?p=a-4) in the same corporation.
- (b) **Nonqualified preferred stock not treated as stock—** For purposes of this section, nonqualified preferred [stock](/usc/26/1504.md?p=a-4) (as defined in [section 351(g)(2)](/usc/26/351.md?p=g-2)) shall be treated as [property](/usc/26/317.md?p=a) other than [stock](/usc/26/1504.md?p=a-4).
- (c) **Cross references—**
  - (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](/usc/26/317.md?p=a) acquired in an exchange described in [subsection (a)](#a), see subsection (d) of section 1031.

## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 309; Pub. L. 105–34, title X, § 1014(e)(3), Aug. 5, 1997, 111 Stat. 921.)

## Notes

### 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 Amendment

Amendment 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.