7
In Starker v. United States, 602 F.2d 1341 (9th Cir. 1979),
the Court of Appeals pointed out that at the time of an agreement
of exchange, the possibility of a cash sale does not preclude the
application of section 1031 if the parties truly intended to have
an exchange of like-kind properties, and if such an exchange is
timely consummated; the transfer of one property and the receipt
of another need not be simultaneous. See Brauer v. Commissioner,
74 T.C. 1134 (1980).
Shortly thereafter, in Biggs v. Commissioner, 632 F.2d 1171
(5th Cir. 1980), affg. 69 T.C. 905 (1978), the Court of Appeals
pointed out that the other party of a proposed nontaxable
exchange need not hold title to the property to be exchanged at
the time of the agreement in order to qualify the transaction as
an exchange under section 1031. Multiple transactions leading up
to the alleged exchange are not necessarily to be considered as
separate sales and purchases. There must, however, be a true
exchange of properties even though with some taxable boot, not
just a sale and a subsequent purchase. The whole transaction
must be shown to be part of an overall plan, which is carried
out.
Concurring with Biggs v. Commissioner, supra, this Court in
Garcia v. Commissioner, 80 T.C. 491 (1983), opined that the step
transaction doctrine is to be included within the reach of
section 1031; the total plan involving a true exchange must be
considered. Nevertheless, the taxpayer's expressed intentions to
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