-40-
Saddle Rock due to a change of ownership effective on June 21,
1991.
For purposes of Federal income taxation, a sale occurs upon
the transfer of benefits and burdens of ownership, rather than
upon the satisfaction of the technical requirements for the
passage of title under State law. Derr v. Commissioner, 77 T.C.
708, 723-724 (1981); Yelencsics v. Commissioner, 74 T.C. 1513,
1527 (1980). The question of when a sale is complete for Federal
income tax purposes is essentially one of fact. Baird v.
Commissioner, 68 T.C. 115, 124 (1977). The applicable test is a
practical one that considers all of the facts and circumstances,
with no single fact controlling the outcome. Derr v.
Commissioner, supra at 724; Baird v. Commissioner, supra at 124;
Deyoe v. Commissioner, 66 T.C. 904, 910 (1976). Generally, a
sale of real property is complete upon the earlier of the
transfer of legal title or the practical assumption of the
benefits and burdens of ownership. Derr v. Commissioner, supra
at 724; Baird v. Commissioner, supra at 124; Deyoe v.
Commissioner, supra at 910.
Coastline did not receive the benefits and burdens of
ownership upon the execution of the contract of sale from
petitioners. Coastline was not entitled to possession until the
recording of the contract of sale (which occurred November 18,
1994). Risk of loss did not pass until Coastline had possession.
Coastline had no obligation to furnish insurance for Saddle Rock
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