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their equity in the homes on the vacate date. In assigned sales,
the RSC paid the difference between the equity payment and the
final sales price from the third-party sale directly to the
employees when the third-party sales closed. In regular sales,
the RSC credited any gain from a third-party sale to petitioner's
account. Although not contractually obligated to do so,
petitioner paid the gain to the employee who owned the residence.
Respondent argues that petitioner did not in fact pay the gain
over to the employees as it claims. However, we find no reason
to doubt petitioner's contention. As petitioner did not profit
from the sale of the residences, it is difficult for us to say
that it was purchasing an ownership interest with the equity
payments. At best, petitioner could recover the payments if the
residences sold to third parties at their appraised values.
In addition, petitioner's actions with respect to the
residences were inconsistent with those of an owner. Petitioner
was not interested in the home's long-term appreciation. It was
concerned with quick sales of the residences even if the sales
were at below the appraised value. Petitioner viewed the costs
of the home disposal program as an expense of conducting its
mainframe business and not as an investment in real estate.
Petitioner paid the costs of home disposal, as well as other
relocation costs of its employees, to induce employees to move
and to speed the relocation process.
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