the holding, the court first referenced the case of Commissioner v. Court Holding Co. From there, the court determined that, for tax purposes, the incidence taxation depends upon the substance of a transaction. 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. The substantive transaction concerning the court was an exchange of like-kind properties between Alloy and Alderson. The deeds were exchanged September 3 or 4, 1957, prior to when the petitioners would have sold Buena Park. The sale arrangement never came to fruition. The Commissioner referenced the case Gregory v. Helvering where the court had held that “the question for determination is whether what was done, apart from the tax motive, was the thing which the statute intended.” The statute intends that only like-kind properties that are exchanged receive any favorable treatment under § 1031. It was held that the intentions of both parties provided motives in accord with the statute. The court also referenced the holding from the case Mercantile Trust Company of Baltimore v. Commissioner. 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. The deal had provided that if the other party could not acquire the desired property by a certain date, the petitioner would sell his property, in a very similar fashion to the deal between Alloy and Alderson. The other property had been acquired and an exchange occurred. The court held that “the above-mentioned agreement … evidenced an intention to exchange the … property, if certain conditions were met, and to sell it, if those conditions were not met. The property was … exchanged. That fact is controlling here.” Significance The holding of the court maintained that so long as an exchange of properties meets all the like-kind requirements, it does not matter whether one of the properties was purchased solely for exchange purposes. See also Jordan Marsh Co. v. Commissioner Notes External links United States Court of Appeals for the Ninth Circuit cases United States taxation and revenue case law 1963 in United States case law