Chapter 294. To amend the Revenue Act of 1921 in respect to exchanges of property
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CHAP. 294.— An Act To amend the Revenue Act of 1921 in respect to exchanges of property. March 4, 1923.[[H. R. 13774](/us/bill/67/hr/13774).][[Public, No. 545](/us/67/pl/545).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, Income tax.*Ante*, p. 230, amended. That paragraph
(1)of subdivision
(c)of section 202 of the Revenue Act of 1921 is amended, to take effect January 1, 1923, to read as follows: "“(1) Exchanges of property.No gain or loss recognized if for like kind or use.Stock and other securities, etc., not included. When any such property held for investment, or for productive use in trade or business (not including stock-in-trade or other property held primarily for sale, and in the case of property held for investment not including stock, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest), is exchanged for property of a like kind or use.” " Sec. 2. *Ante*, p. 230, amended. Subdivision
(e)of section 202 of the Revenue Act of 1921 is amended, to take effect January 1, 1923, to read as follows: " “(e) Exchanges for property of no value with money and property of value.Taxed on excess of basis. Where property is exchanged for other property which has no readily realizable market value, together with money or other property which has a readily realizable market value, then the money or the fair market value of the property having such readily realizable market value received in exchange shall be applied against and reduce the basis, provided in this section, of the property exchanged, If other than similar property received.and if in excess of such basis shall be taxable to the extent of the excess; but when property is exchanged for property specified in paragraphs (1), (2), and
(3)of subdivision
(c)as received in exchange, together with money or other property of a readily realizable market value other than that specified in such paragraphs, Resulting gain taxed.the amount of the gain resulting from such exchange shall be computed in accordance with subdivisions
(a)and
(b)of this section, Limitation.but in no such case shall the taxable gain exceed the amount of the money and the fair market value of such other property received in exchange.”" Approved, March 4, 1923.