- 19 - ownership and bear the risks of ownership during the period at issue. Alstores Realty Corp. v. Commissioner, 46 T.C. 363 (1966). Taxation is more concerned with a taxpayer's actual control over the property than with title over the property. Frank Lyon Co. v. United States, 435 U.S. 561, 572 (1978); Corliss v. Bowers, 281 U.S. 376, 378 (1930); Towlinsky v. Commissioner, 86 T.C. 1009, 1041 (1986). Respondent determined that the trusts earned $90,596 from mortgages which were serviced by Berkley. Petitioner argues that the trusts did not earn income from the mortgages because the mortgages were titled in the name of Berkley. We agree with respondent. We hold that the trusts owned the mortgages at issue because Berkley transferred the mortgages to the trusts as part of a "partial debts settlement" of the debts owed by the estate to the trusts. Berkley serviced the mortgages on the condominium developments. All mortgage payments from the La Playa and Blue Grass developments were made to Berkley. Each month, Berkley would collect all mortgage payments from the mortgagors. Then, Berkley would prepare a schedule showing the mortgage number, the total payment, and the principal and interest for each mortgage. The trusts clearly owned the La Playa and Blue Grass mortgages during the fiscal year ended February 28, 1985. On its books, Berkley indicated that the trusts owned the La Playa and Blue Grass developments. A Berkley work paper reflects a journalPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011