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Commissioner, 430 F.2d 1019, 1023 (6th Cir. 1970), affg. Estate
of Johnston v. Commissioner, 51 T.C. 290 (1968)).
In a Federal tax controversy, State law controls the
determination of the taxpayer's interest in the property, and the
tax consequences are then determined under Federal law. United
States v. National Bank of Commerce, 472 U.S. 713, 722 (1985)
(and cases cited and quoted therein). To decide when equitable
title (i.e., the benefits and burdens of ownership) passes, we
consider the following factors under State law: (1) Legal title;
(2) intent of parties; (3) equity in property; (4) existence of
present obligation to complete transfer; (5) right of possession;
(6) party paying property taxes; (7) party bearing risk of loss;
and (8) party receiving profits from operation and sale of
property. Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C.
1221, 1237-1238 (1981); Spyglass Partners v. Commissioner, T.C.
Memo. 1995-452.
Although Howard Berger and Alice Berger had held joint legal
title to the Woodbine property since October 26, 1983, Alice
Berger did not participate in the operation of the Woodbine
business prior to Howard Berger's illness in June 1986. Neither
had she received any benefits from her ownership interest in the
Woodbine property during the years of the marriage prior to June
1986, other than indirectly through the support and maintenance
she received from Howard Berger. After Howard Berger's illness,
and the breakup of the marriage, however, her involvement in the
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