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implication of the section involved makes its
application dependent on state law. * * * [United
States v. Peltzer, 312 U.S. 399, 402-403 (1941).]
Respondent does not point to any circumstance showing that
Congress intended that a DISC's ability to satisfy the 95 percent
of assets test depends solely upon State law governing the
passage of title, and we are unable to discern any such intent on
the part of Congress. See also Tumac Lumber Co. v. United
States, 625 F. Supp. 1030, 1032 (D. Or. 1985) ("It was not the
intention of the U.C.C. drafters that the U.C.C. should apply to
transactions such as those" involving the assignment of accounts
receivable to a DISC).10
Generally, the time of passage of title under State law,
while highly significant, is only one factor to be considered in
deciding when a sale occurs for Federal tax purposes and is not
controlling. See Morco Corp. v. Commissioner, 300 F.2d 245, 246
(2d Cir. 1962), affg. T.C. Memo. 1961-57; Rich Lumber Co. v.
United States, supra. Where passage of legal title is delayed,
an agreement may still result in a sale of property where,
looking to all of the facts and circumstances, the parties to the
agreement intended the agreement to result in a sale, and the
10
We note that, although the Commissioner’s rulings are not
binding upon this Court, Halliburton Co. v. Commissioner, 100
T.C. 216, 232 (1993), affd. without published opinion 25 F.3d
1043 (5th Cir. 1994), in Rev. Rul. 75-430, 1975-2 C.B. 313, the
Commissioner ruled that accounts receivable transferred to a DISC
by its parent were "qualified export assets" within the meaning
of sec. 993(b)(3) without considering whether the transfer
complied with the applicable provisions of State law.
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