- 34 -
forth the following approach to resolve the issue of when a sale
is complete:
For purposes of Federal income taxation, a sale
occurs upon the transfer of the benefits and burdens of
ownership rather than upon the satisfaction of the
technical requirements for the passage of title under
State law. The question of when a sale is complete for
Federal tax purposes is essentially one of fact. The
applicable test is a practical one which considers all
the facts and circumstances, with no single factor
controlling the outcome. [Citations omitted.]
See also J.B.N. Tel. Co., Inc. v. United States, 638 F.2d 227,
232 (10th Cir. 1981); Rich Lumber Co. v. United States, 237 F.2d
424, 427 (1st Cir. 1956); Guardian Indus. Corp. v. Commissioner,
97 T.C. 308, 318 (1991), affd. without published opinion 21 F.3d
427 (6th Cir. 1994); Yelencsics v. Commissioner, 74 T.C. 1513,
1527 (1980).
Respondent contends that the sale of CV's qualified export
receivables could not have occurred prior to the close of CVI's
relevant taxable years because the requirements for the transfer
of accounts receivable prescribed by Article 9 of the Uniform
Commercial Code (U.C.C.) as adopted by Massachusetts were not
satisfied. We do not agree. Generally, State law is not
dispositive of whether or when a sale or transfer of property
occurs for Federal tax purposes. Burnet v. Harmel, 287 U.S. 103,
110 (1932); Snyder v. Commissioner, 66 T.C. 785, 792 (1976). As
the Supreme Court has stated:
the revenue laws are to be construed in the light of
their general purpose to establish a nationwide scheme
of taxation uniform in its application. Hence their
provisions are not to be taken as subject to state
control or limitation unless the language or necessary
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011