Practice question
A property-for-stock exchange satisfies every applicable section 40(C)(2) nonrecognition condition. An officer says gain must be currently recognized merely because value changed hands. Which is best?
- Every exchange is always currently taxable
- Nonrecognition is impossible after CREATE
- Only cash exchanges can exist
- The officer may ignore the exception
- The qualifying statutory exception governs current recognition despite the exchange
Legal references
- https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html — NIRC, section 40(A)–(C)
- https://lawphil.net/statutes/repacts/ra2021/ra_11534_2021.html — RA 11534, section 10 amending NIRC section 40(C)(2)
- https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html — RA 12214, section 8 amending NIRC section 32(A)(1)
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