[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1081-10]

[Page 195-196]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1081-10  Nonapplication of other provisions of the Internal 
Revenue Code of 1954.

    The effect of section 1081(g) is that an exchange, sale, or 
distribution which is within section 1081 shall, with respect to the 
nonrecognition of gain or loss and the determination of basis, be 
governed only by the provisions of part VI

[[Page 196]]

(section 1081 and following), subchapter O, chapter 1 of the Code, the 
purpose being to prevent overlapping of those provisions and other 
provisions of subtitle A of the Code. In other words, if by virtue of 
section 1081 any portion of a person's gain or loss on any particular 
exchange, sale, or distribution is not to be recognized, then the gain 
or loss of such person shall be nonrecognized only to the extent 
provided in section 1081, regardless of what the result might have been 
if part VI (section 1081 and following), subchapter O, chapter 1 of the 
Code, had not been enacted; and similarly, the basis in the hands of 
such person of the property received by him in such transaction shall be 
the basis provided by section 1082, regardless of what the basis of such 
property might have been under section 1011 if such part VI had not been 
enacted. On the other hand, if section 1081 does not provide for the 
nonrecognition of any portion of a person's gain or loss (whether or not 
such person is another party to the same transaction referred to above), 
then the gain or loss of such person shall be recognized or 
nonrecognized to the extent provided for by other provisions of subtitle 
A of the Code as if such part VI had not been enacted; and similarly, 
the basis in his hands of the property received by him in such 
transaction shall be the basis provided by other provisions of subtitle 
A of the Code as if such part VI had not been enacted.