[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: 26CFR1.1082-2]

[Page 199-200]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1082-2  Basis of property acquired upon exchanges under section 1081 (a) or (e).

    (a) In the case of an exchange of stock or securities for stock or 
securities as described in section 1081 (a), if no part of the gain or 
loss upon such exchange was recognized under section 1081, the basis of 
the property acquired is the same as the basis of the property 
transferred by the taxpayer with proper adjustments to the date of the 
exchange.
    (b) If, in an exchange of stock or securities as described in 
section 1081 (a), gain to the taxpayer was recognized under section 1081 
(e) on account of the receipt of money, the basis of the property 
acquired is the basis of the property transferred (adjusted to the date 
of the exchange), decreased by the amount of money received and 
increased by the amount of gain recognized upon the exchange. If, upon 
such exchange, there were received by the taxpayer money and other 
nonexempt property (not permitted to be received without the recognition 
of gain), and gain from the transaction was recognized under section 
1081 (e), the basis (adjusted to the date of the exchange) of the 
property transferred by the taxpayer, decreased by the amount of money 
received and increased by the amount of gain recognized, must be 
apportioned to and is the basis of the properties (other than money) 
received on the exchange. For the purpose of the allocation of such 
basis to the properties received, there must be assigned to the 
nonexempt property (other than money) an amount equivalent to its fair 
market value at the date of the exchange.
    (c) Section 1081(e) provides that no loss may be recognized on an 
exchange of stock or securities for stock or securities as described in 
section 1081(a), although the taxpayer receives money or other nonexempt 
property from the transaction. However, the basis of the property (other 
than money) received by the taxpayer is the basis (adjusted to the date 
of the exchange) of the property transferred, decreased by the amount of 
money received. This basis must be apportioned to the properties 
received, and for this purpose there must be allocated to the nonexempt 
property (other than money) an amount of such basis equivalent to the 
fair market value of such nonexempt property at the date of the 
exchange.
    (d) Section 1082 (a) does not apply in ascertaining the basis of 
property acquired by a corporation by the issuance of its stock or 
securities as the consideration in whole or in part for the transfer of 
the property to it. For the rule in such cases, see section 1082 (b).
    (e) For purposes of this section, any reference to section 1081 
shall be

[[Page 200]]

deemed to include a reference to corresponding provisions of prior 
internal revenue laws.