Calkain Companies, Inc.

Title 26 - Internal Revenue Code ("IRC")
Sub Title A - Income Taxes
Chapter 1 - Normal Taxes and Surtaxes
Subchapter O - Gain or Loss on Disposition of Property
Part III - Common Non-Taxable Exchanges

Section 1032 - Exchange of Stock for Property

(a) Nonrecognition of gain or loss --

No gain or loss shall be recognized to a corporation on the receipt of money or other property in exchange for stock (including treasury stock) of such corporation. No gain or loss shall be recognized by a corporation with respect to any lapse or acquisition of an option, or with respect to a securities futures contract (as defined in section 1234B), to buy or sell its stock (including treasury stock).

(b) Basis --

For basis of property acquired by a corporation in certain exchanges for its stock, see section 362.