2006 New York Code - Exchange Of Property.

 
    §  11-615  Exchange of property. Upon the sale or exchange of property
  the entire amount of the gain or loss, determined under  section  11-614
  of  this  part,  shall  be recognized, except as hereinafter provided in
  this section:
    1. No  gain  or  loss  shall  be  recognized  if  common  stock  in  a
  corporation   is   exchanged   solely  for  common  stock  in  the  same
  corporation, or if preferred stock in a corporation is exchanged  solely
  for preferred stock in the same corporation;
    2.  No  gain  or  loss shall be recognized if stock or securities in a
  corporation a party to a reorganization are, in pursuance of the plan or
  reorganization,  exchanged  solely  for  stock  or  securities  in  such
  corporation or in another corporation a party to the reorganization;
    3.  No  gain  or  loss shall be recognized if a taxpayer, a party to a
  reorganization,  exchanges  property,  in  pursuance  of  the  plan   of
  reorganization,  solely for stock or securities in another corporation a
  party to the reorganization; and
    4. No gain or loss shall be recognized if property is transferred to a
  corporation by a taxpayer solely in exchange for stock or securities  in
  such corporation, and immediately after the exchange such taxpayer is in
  control of the corporation; but in the case of an exchange by a taxpayer
  and  one  or  more  other corporations or persons this subdivision shall
  apply only if the amount of the stock and securities received by each is
  substantially in proportion to its interest in the property prior to the
  exchange.
    5. If property (as a result of its destruction in whole  or  in  part,
  theft  or  seizure,  or  an  exercise  of  the  power  of requisition or
  condemnation, or the threat of imminence  thereof)  is  compulsorily  or
  involuntarily  converted  into property similar or related in service or
  use to the property so converted, or into money which  is  forthwith  in
  good faith, under regulations prescribed by the commissioner of finance,
  expended  in  the  acquisition  of  other property similar or related in
  service or use to the property so converted, or in  the  acquisition  of
  control  of  a  corporation  owning  such  other  property,  or  in  the
  establishment  of  a  replacement  fund,  no  gain  or  loss  shall   be
  recognized.  If  any  part of the money is not so expended, the gain, if
  any, shall be recognized, but in an amount not in excess  of  the  money
  which is not so expended.
    6.  If there is distributed, in pursuance of a plan of reorganization,
  to  a  taxpayer  shareholder  in  a   corporation   a   party   to   the
  reorganization,  stock  or  securities in such corporation or in another
  corporation a party to the reorganization, without the surrender by such
  taxpayer shareholder of stock or securities in such  a  corporation,  no
  gain  to  the  distributee  from the receipt of such stock or securities
  shall be recognized.
    7. If an exchange would be within the provisions of  subdivision  one,
  two,  or  four  of  this  section  if  it were not for the fact that the
  property received in exchange consists not only of property permitted by
  such subdivision 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.
    8. If an exchange would be within the provisions of subdivision  three
  of  this  section if it were not for the fact that the property received
  in exchange consists not only of stock or securities permitted  by  such
  subdivision  to be received without the recognition of gain, but also of
  other property or money, then:


    (a) If the taxpayer receiving such other property or money distributes
  it in pursuance of the plan of reorganization, no gain to  the  taxpayer
  shall be recognized from the exchange, but
    (b)  If  the  taxpayer receiving such other property or money does not
  distribute it in pursuance of the plan of reorganization, the  gain,  if
  any, to the taxpayer 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 so received, which is not so distributed.
    9. If an exchange would be within the provisions of  subdivision  one,
  two, three, or four of this section if it were not for the fact that the
  property received in exchange consists not only of property permitted by
  such subdivision 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.
    10. As used in this section:
    The  term  "reorganization"  means  (a)  a  merger  or   consolidation
  (including  the acquisition by one corporation of at least a majority of
  the voting stock and at least a majority of the total number  of  shares
  of  all  other classes of stock of another corporation, or substantially
  all the properties of another corporation),  or  (b)  a  transfer  by  a
  corporation  of  all  or  a part of its assets to another corporation if
  immediately after the transfer the transferor  or  its  stockholders  or
  both  are  in  control  of  the  corporation  to  which  the  assets are
  transferred, or  (c)  a  recapitalization,  or  (d)  a  mere  change  in
  identity, form or place of organization, however effected;
    The  term  "a  party  to  a  reorganization"  includes  a  corporation
  resulting from a reorganization and includes both  corporations  in  the
  case  of an acquisition by one corporation of at least a majority of the
  voting stock and at least a majority of the total number  of  shares  of
  all other classes of stock of another corporation; and
    The  term  "control" means the ownership of at least eighty per centum
  of the voting stock and at least eighty per centum of the  total  number
  of shares of all other classes of stock of the corporation.
    11. No gain or loss shall be recognized upon the receipt by a taxpayer
  of  property  distributed  in complete liquidation of a corporation. For
  the purposes of this subdivision a distribution shall be  considered  to
  be in complete liquidation only if:
    (a)  the  taxpayer  receiving  such  property  was, on the date of the
  adoption of the plan of liquidation, and has  continued  to  be  at  all
  times  until  the  receipt  of the property, the owner of stock (in such
  corporation) possessing at least eighty per centum of the total combined
  voting power of all classes of stock entitled to vote and the  owner  of
  at  least  eighty  per centum of the total number of shares of all other
  classes of stock (except non-voting stock which is limited and preferred
  as to dividends), and was at no  time  on  or  after  the  date  of  the
  adoption  of  the  plan  of  liquidation  and  until  the receipt of the
  property the owner of a greater percentage of any class  of  stock  than
  the  percentage  of  such  class owned at the time of the receipt of the
  property; and either:
    (b) the distribution is by such corporation in  complete  cancellation
  or  redemption  of  all  its stock, and the transfer of all the property
  occurs  within  the  base  year;  in  such  case  the  adoption  by  the
  shareholders   of   the   resolution   under  which  is  authorized  the
  distribution  of  all  the  assets  of  the  corporation   in   complete
  cancellation  or  redemption  of  all  its stock, shall be considered an
  adoption of  a  plan  of  liquidation,  even  though  no  time  for  the
  completion  of  the  transfer  of  the  property  is  specified  on such
  resolution; or


    (c) such distribution is one of a  series  of  distributions  by  such
  corporation  in  complete cancellation or redemption of all its stock in
  accordance with a plan of liquidation under which the  transfer  of  all
  the property under the liquidation is to be completed within three years
  from  the close of the year during which is made the first of the series
  of distributions under the plan, except that if  such  transfer  is  not
  completed  within  such  period,  or  if  the taxpayer does not continue
  qualified under paragraph (a) until the completion of such transfer,  no
  distribution  under  the  plan  shall  be  considered  a distribution in
  complete liquidation.
    If such transfer of all the property does not occur within  the  year,
  the  commissioner  of  finance may require of the taxpayer such bond, or
  waiver of the statute of limitations on assessment  and  collection,  or
  both,  as the commissioner may deem necessary to insure, if the transfer
  of the property is not completed within such three year  period,  or  if
  the  taxpayer  does not continue qualified under paragraph (a) until the
  completion of such transfer, the assessment and collection of all  taxes
  then  imposed  under this part for such year or subsequent years, to the
  extent attributable to property so received.  A  distribution  otherwise
  constituing a distribution in complete liquidation within the meaning of
  this  paragraph  shall  not  be  considered  as  not constituting such a
  distribution merely because it does not  constitute  a  distribution  or
  liquidation  within  the  meaning  of  the corporate law under which the
  distribution is made; and for the purposes of this paragraph a  transfer
  of  property of such corporation to the taxpayer shall not be considered
  as not constituting a distribution (or one of a series of distributions)
  in complete  cancellation  or  redemption  of  all  the  stock  of  such
  corporation,  merely  because the carrying out of the plan involves: (1)
  the transfer under the plan to  the  taxpayer  by  such  corporation  of
  property,  not  attributable  to  shares  owned by the taxpayer, upon an
  exchange described in subdivision three of this  section,  and  (2)  the
  complete  cancellation  or  redemption  under  the  plan, as a result of
  exchanges described in subdivision two of this section,  of  the  shares
  not owned by the taxpayers.