The deal further stipulated that if Alloy could not acquire the property by September 11, 1957, the petitioners would sell Buena Park to them and then purchase Salinas themselves.

The tax court held that the disposal of Buena Park and acquisition of Salinas did not constitute an exchange under § 1031(a) of the Internal Revenue Code.

[3] The court concluded that Buena Park was sold to Alloy and that the petitioners had purchased the Salinas property due to their escrow arrangement.

The Court of Appeals held that the property transaction between Alloy and Alderson had been a like-kind exchange subject to § 1031 treatment.

It was held that any tax consequences arising from gains from property sale are not to be ultimately determined solely by the means employed to transfer legal title.

Rather, the court determined, such transaction must be viewed as a whole, and each step, from the commencement of negotiations to the consummation of the sale, is relevant.

[11] In that case, a similar transaction had occurred wherein the petitioner had wanted to exchange a property for one that had yet to be purchased by the other party.