A taxpayer owns building A, which he uses in his business. He would like to dispose of this building and move to another location to conduct business. He has identified building B as an ideal new location. He already has a buyer for building A. In fact, the taxpayer and the interested buyer, Mr. X, have already signed a sales contract. No conditions of escrow have yet been satisfied. No money has changed hands. Escrow is to close in 60 days.
Someone suggested to the taxpayer that he exchange his property for the one he wants instead of selling his existing property and buying the newly located property. Assuming all parties are willing and ignoring potential value differences, will the non recognition provisions of the Code be available to the taxpayer even though he already signed a contract to sell?