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original intent was to purchase 15 Hastings, but they could not
get the funds together for the downpayment. Mrs. Wood said the
agreement was then converted to a straight month-to-month lease.
The testimony given by the parties as to the agreement is
consistent with treating the agreement as a lease option.
Although the Woods wished to purchase 15 Hastings, the agreement
gave them the option of purchasing the property if they could
sell their home and get the funds for the downpayment on
15 Hastings. Because the Woods were in the midst of a divorce,
Mrs. Wood needed a place to live; thus, the lease option
agreement met the intention of the parties to the agreement.
Respondent also argues that the execution of the $232,000
note was in essence a downpayment by petitioners and that the
note is evidence of a sale. However, under a consideration of
all of the facts and circumstances, we do not conclude that this
factor is controlling.
In summary, the passage of benefits and burdens of ownership
to the Woods in the absence of title, of an enforceable land sale
contract, and of intent to effect an immediate sale does not give
us grounds for treating the agreement between petitioners and the
Woods as anything other than a lease option agreement.
Unreported Income--Clerical Fee
Respondent determined that, in 1991, petitioners received a
clerical fee in the amount of $535 from Mr. Wood. Petitioners
did not present any evidence to contradict respondent's
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