Treasury Regulations · 26 CFR
§ 1.356-4. Exchanges for section 306 stock.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 356
Cite as 26 CFR § 1.356-4
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Source
- T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960; T.D. 9989, 89 FR 17606, Mar. 11, 2024, unless otherwise noted.
- Issued under
- 26 U.S.C. § 356
- Length
- 220 words · about 1 min to read
- Cross-references
- cites 3 Code sections and 0 regulations; cited by 0
If, in a transaction to which section 356 is applicable, other property or money is received in exchange for section 306 stock, an amount equal to the fair market value of the property plus the money, if any, shall be treated as a distribution of property to which section 301 is applicable. The determination of whether section 306 stock is surrendered for other property (including money) is a question of fact to be decided under all of the circumstances of each case. Ordinarily, the other property (including money) received will first be treated as received in exchange for any section 306 stock owned by a shareholder prior to such transaction. For example, if a shareholder who owns a share of common stock (having a basis to him of $100) and a share of preferred stock which is section 306 stock (having a basis to him of $100) surrenders both shares in a transaction to which section 356 is applicable for one share of common stock having a fair market value of $80 and one $100 bond having a fair market value of $100, the bond will be deemed received in exchange for the section 306 stock and it will be treated as a distribution to which section 301 is applicable to the extent of its entire fair market value ($100).
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Effects on shareholders and security holders
Nearby sections
- § 1.355-8 Definition of predecessor and successor and limitations on gain recognition under section 355(e) and section 355(f).
- § 1.356-1 Receipt of additional consideration in connection with an exchange.
- § 1.356-2 Receipt of additional consideration not in connection with an exchange.
- § 1.356-3 Rules for treatment of securities as “other property”.
- § 1.356-4 Exchanges for section 306 stock.
- § 1.356-5 Transactions involving gift or compensation.
- § 1.356-6 Rules for treatment of nonqualified preferred stock as other property.
- § 1.356-7 Rules for treatment of nonqualified preferred stock and other preferred stock received in certain transactions.
- § 1.357-1 Assumption of liability.