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to Trust No. 234 was a sham transaction. Respondent, on the
other hand, argues that such a determination was reasonable,
particularly in light of the postsale use by petitioners and
their daughter.
A "sham" transaction is one which, though it may be proper
in form, lacks economic substance beyond the creation of tax
benefits. Karr v. Commissioner, 924 F.2d 1018, 1022-1023 (11th
Cir. 1991), affg. Smith v. Commissioner, 91 T.C. 733 (1988). In
the context of a sale transaction, as here, the inquiry is
whether the parties have in fact done what the form of their
agreement purports to do. Grodt & McKay Realty, Inc. v.
Commissioner, 77 T.C. 1221, 1237 (1981).
The term "sale" is given its ordinary meaning for Federal
income tax purposes and is generally defined as a transfer of
property for money or a promise to pay money. Commissioner v.
Brown, 380 U.S. 563, 570-571 (1965). In deciding whether a
particular transaction constitutes a sale, the question of
whether the benefits and burdens of ownership have passed from
seller to buyer must be answered. This is a question of fact
which is to be ascertained from the intention of the parties, as
evidenced by the written agreements read in light of the
attendant facts and circumstances. Haggard v. Commissioner, 24
T.C. 1124, 1129 (1955), affd. 241 F.2d 288 (9th Cir. 1956).
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