REV-RUL, SECTION 1002.--RECOGNITION OF GAIN OR LOSS, Rev. Rul. 56-437, 1956-2 CB 507, (Jan. 01, 1956)
Rev. Rul. 56-437, 1956-2 CB 507

SECTION 1002.--RECOGNITION OF GAIN OR LOSS

The conversion, for the purpose of eliminating a survivorship feature, of a joint tenancy in capital stock of a corporation into a tenancy in common is a nontaxable transaction for Federal income tax purposes.  Likewise, the severance of a joint tenancy in stock of a corporation, under a partition action instituted under sections 103-1-1 to 10 of Colorado Revised Statutes, 1953, compelling partition and the issuance of two separate stock certificates in the names of each of the joint tenants, is a nontaxable transaction.  In each case there was no sale or exchange and the taxpayers neither realized a taxable gain nor sustained a deductible loss.  See I. T. 1761, C. B. II-2, 56 (1923), holding that although the transfer of stock from the name of an individual to the name under which the individual does business is subject to tax under the stamp tax law (Schedule A-3, Title XI of the Revenue Act of 1921), it is not a sale within the meaning of the income tax law.  See also Rev. Rul. 55-77, C. B. 1955-1, 339, and Rev. Rul. 55-179, C. B. 1955-1, 340.