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created as a result of a transfer or distribution depends upon
whether, at the time the funds are disbursed, the parties to the
transfer at the time of disbursement, intend that they be repaid.
Crowley v. Commissioner, 962 F.2d 1077, 1079 (1st Cir. 1992),
affg. T.C. Memo. 1990-636; Delta Plastics Corp. v. Commissioner,
54 T.C. 1287, 1291 (1970).
Viewing in its entirety each of the transfers by CVI of
funds insofar as the transfer concerned the export promotion
expenses incurred by, and the dividends paid to, CV, we conclude
that the funds were not assets of CVI as of the close of each of
its relevant taxable years.
One factor we consider is whether, pursuant to Massachusetts
law, title to the funds transferred by CVI to CV passed to CV by
the close of CVI’s relevant taxable years. Massachusetts’ law
provides that possession of property, with the exercise of the
rights of ownership, is evidence of title and ordinarily makes a
prima facie case of title by the possessor. Hurley v. Noone, 196
N.E.2d 905, 908-909 (Mass. 1964). If, however, evidence is
introduced to qualify the evidence of possession, the whole of
the evidence is to be considered together to determine the true
title. Id. at 909. In the instant case, CV was in possession
of, and exercised ownership rights over, all of the cash
transferred by CVI by the close of CVI's relevant taxable years,
and the evidence of CV's possession has not been qualified by any
other evidence in the record indicating that CV was not the owner
of the cash. Accordingly, we conclude that, pursuant to
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