Reg. § 1.1032-1 Disposition by a corporation of its own capital stock.
(a) The disposition by a corporation of shares of its own stock (including treasury stock) for money or other property does not give rise to taxable gain or deductible loss to the corporation regardless of the nature of the transaction or the facts and circumstances involved. For example, the receipt by a corporation of the subscription price of shares of its stock upon their original issuance gives rise to neither taxable gain nor deductible loss, whether the subscription or issue price be equal to, in excess of, or less than, the par or stated value of such stock. Also, the exchange or sale by a corporation of its own shares for money or other property does not result in taxable gain or deductible loss, even though the corporation deals in such shares as it might in the shares of another corporation. A transfer by a corporation of shares of its own stock (including treasury stock) as compensation for services is considered, for purposes of section , as a disposition by the corporation of such shares for money or other property.
(b) Section does not apply to the acquisition by a corporation of shares of its own stock except where the corporation acquires such shares in exchange for shares of its own stock (including treasury stock). See , relating to treatment of acquisitions of a corporation's own stock. Section also does not relate to the tax treatment of the recipient of a corporation's stock.
(c) Where a corporation acquires shares of its own stock in exchange for shares of its own stock (including treasury stock) the transaction may qualify not only under section , but also under section (recapitalization) or section (distribution of stock and stock rights).
(d) For basis of property acquired by a corporation in connection with a transaction to which section applies or in connection with a reorganization, see section . For basis of property acquired by a corporation in a transaction to which section applies but which does not qualify under any other nonrecognition provision, see section .