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intangible, however, we must first identify a transfer of the
intangible as required by section 482. Petitioners’ discussion
of whether or not a transfer of the intangible occurred is
cursory at best.
The essence of a transfer, as respects taxation, is the
passage of control over the economic benefits of property rather
than any technical changes in its title. Estate of Sanford v.
Commissioner, 308 U.S. 39, 43 (1939); Burnet v. Guggenheim, 288
U.S. 280, 287 (1933). The word “transfer”, as used in the tax
law, has its ordinary significance and means the handing over or
parting with property with intent to pass it, or certain rights
in it, to another, who becomes the transferee. In re Gould’s
Estate, 156 N.Y. 423, 51 N.E. 287, 288 (1898).
Inherent in the definition of transfer is the concept that
the transferor must control or own the rights or economic
benefits that the transferor desires to transfer to the
transferee. To establish that a transfer has occurred, we must
identify who owns the rights and economic benefits of the
property that is the subject of the transfer. Section 1.482-
4(f)(3)(ii)(B), Income Tax Regs., defines ownership as follows:
(B) Intangible property that is not legally
protected. In the case of intangible property that is
not legally protected, the developer of the intangible
will be considered the owner. * * *. Ordinarily, the
developer is the controlled taxpayer that bore the
largest portion of the direct and indirect costs of
developing the intangible, including the provision,
without adequate compensation, of property or services
likely to contribute substantially to developing the
intangible. A controlled taxpayer will be presumed not
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