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petitioner intended to acquire legal title to the residences at
some future time. Petitioner generally did not hold itself out as
the purchaser or owner of the residences.
Respondent contends that the parties entered into binding
contracts for the sale of the residences. Respondent relies on
language in the contracts of sale that identifies the RSC as the
purchaser and the employees as the sellers and provides that the
RSC agrees to purchase and the employees agree to sell the
residences. However, the RSC's obligation to purchase the
residences was conditional, and the contracts of sale were
executory in nature. The contracts of sale did not purport to
convey ownership of the residences to either petitioner or the
RSC. Although in some circumstances an executory contract may
constitute a sale for Federal tax purposes, this is not one of
them.5
Relocating employees did not have a present, legally
enforceable right to compel the RSC to purchase the residences.
Under the terms of the contract of sale, a relocating employee
agreed to convey title to the residence at the RSC's request to
the RSC or a person it designates. The contracts delayed passage
of title to the RSC for 1 year from the date the parties entered
5 Even if the RSC is considered the buyer, the RSC's
relationship with petitioner will not ipso facto result in the
ownership’s being attributed to petitioner for Federal tax
purposes.
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