- 17 -
(4) whether the contract creates a present
obligation on the seller to execute and
deliver a deed and a present obligation on
the purchaser to make payments; (5) whether
the right of possession is vested in the
purchaser; (6) which party pays the property
taxes; (7) which party bears the risk of loss
or damage to the property; and (8) which
party receives the profits from the operation
and sale of the property. * * * [Id. at 1237-
1238; citations omitted.]
Although passage of a title is not determinative, it is an
important factor in whether a sale has occurred. Harmston v.
Commissioner, 61 T.C. 216, 229 (1973), affd. 528 F.2d 55 (9th
Cir. 1976); Ryan v. Commissioner, T.C. Memo. 1995-579.
Relocating employees delivered signed deeds to the RSC that
omitted the names of the grantees. The employees authorized the
RSC, by a power of attorney, to fill in the grantees' names.
Respondent concedes that petitioner did not acquire legal title
to the residences. Title remained with the relocating employees
and passed directly to the third-party purchasers.
As petitioner did not acquire legal ownership of the
residences, we must determine whether it acquired beneficial
ownership of the residences. Deyoe v. Commissioner, 66 T.C. 904,
910 (1976). We find that petitioner did not acquire beneficial
ownership of the residences. In part, respondent's argument that
petitioner owned the residences is based on an agency
relationship existing between petitioner and the RSC. Respondent
cites petitioner's relocation brochure which refers to the RSC as
a third-party agent as evidence of the agency relationship
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011