IRS Revenue Ruling 1957-365 (Rev. Rul. 57-365)
Internal Revenue Service (I.R.S.)
Section 1.1031 — Property Held for Productive Use In Trade or Business or for Investment
26 CFR 1.1031(a)-1
Where the parent corporation of a telephone system causes one of its operating subsidiary companies to exchange all of its assets, including both real estate and personal property (but not including items of inventory and securities), for all of the similar assets of another operating telephone company and cash to equalize the value of the assets exchanged, an exchange of the assets of one such business for identical assets of another such business will be considered an exchange of ‘property of like kind’ within the meaning of section 1031 of the Code, on which, pursuant to the provisions of section 1031(b), gain, if any, will be recognized only to the extent of the cash received. Cf. Aaron F. Williams v. McGowan, 152 Fed.(2d) 570; also Rev. Rul. 55-79, C.B. 1955-1, 370.
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