Alderson v. Commissioner, 317 F.2d 790 (9th Cir. 1963) was a tax law case in which the United States Court of Appeals for the Ninth Circuit reversed the ruling of the United States Tax Court that an exchange of properties does not constitute a taxable sale under § 1031(a) of the Internal Revenue Code. Facts The petitioners of the case, comprising James Alderson and the estate of his wife Clarissa ("Alderson"), owned a property entitled “Buena Park”. They formed a deal with Alloy Die Casting Company (“Alloy”) in which they intended to sell the property to the company. Shortly thereafter, the petitioners discovered a different property (“Salinas”) which they wanted to obtain in exchange for Buena Park. They arranged a deal with Alloy whereby Alloy would purchase Salinas and then exchange it for Buena Park. The petitioners would then give Alloy any discrepancy in the form of cash. 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. Eventually, Alloy did purchase Salinas and the properties were exchanged. Tax Court ruling 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. The court reasoned that the petitioners intended from the outset to exchange their property for another of a like kind and that Alloy acquired the title to the Salinas property for the sole purpose of an exchange of it for Buena Park. The court concluded that Buena Park was sold to Alloy and that the petitioners had purchased the Salinas property due to their escrow arrangement. Thus, the tax court ruled that the motives of the petitioners indicated a sale and not an exchange. Issue The issue before the Court of Appeals was whether the transaction between Alloy and Alderson constituted a sale of the Buena Park property and then a subsequent purchase of the Salinas property, or a like-kind exchange under I.R.C. § 1031. Appellate court holding The Court of Appeals held that the property transaction between Alloy and Alderson had been a like-kind exchange subject to § 1031 treatment. The holding of the tax court was thereby reversed. Reasoning The court held that because the properties had indeed been exchanged, they are subject to nonrecognition of gain under § 1031. In