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taxpayers/sellers of a residence argued that the date of sale
was the date they delivered the deed to the buyers. Before
the sellers delivered the deed, the buyers had signed a
land contract, paid 29 percent of the purchase price, assumed
responsibility for taxes and insurance, and had the right to
improve the property without the sellers' consent and to receive
title on payment of the full purchase price. Id. at 498. The
sellers did not have the right to receive full payment if the
buyers defaulted. Id. at 497. The Court of Appeals for the
Sixth Circuit held that the sale of the residence was complete
when the benefits and burdens of ownership passed to the buyers,
rather than on the later date when the taxpayers delivered the
deed and received full payment of the purchase price. Id. at
498.
Petitioners' reliance on Baertschi is misplaced for several
reasons. First, the parties there signed a land contract, which
was not considered by the purchasers to be an option agreement.
Id. at 496. Under a land sale contract, the seller holds title
to the property as security for the payment by the buyer of the
remaining purchase price. Cal. Civ. Code sec. 2985 (West 1993).2
2 Cal. Civ. Code sec. 2985 (West 1993) defines a land sale
contract as: "an agreement wherein one party agrees to convey
title to real property to another party upon the satisfaction
of specified conditions set forth in the contract and which does
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