Addison Distribution, Inc. - Page 10

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            customers for a fee.                                                                         
                  Petitioners' argument is without merit.  AEI, in any given                             
            transaction, acted as both the buyer pursuant to its contract                                
            with the vendor or subcontractor and the seller pursuant to its                              
            contract with its customers.  California Commercial Code section                             
            2106 provides that a "sale" consists in the passing of title from                            
            the seller to the buyer for a price.  Thus, it would be                                      
            impossible under California law for AEI to have purchased and                                
            resold the electronic materials without title having passed from                             
            the vendors or subcontractors to AEI and then from AEI to its                                
            customers.  See also Tebarco Mechanical Corp. v. Commissioner,                               
            T.C. Memo. 1997-311.  Additionally, the parties stipulated a                                 
            typical purchase order between AEI and its customers that                                    
                  title to * * * all items shipped by Seller [AEI] to                                    
                  Buyer [AEI's customers] shall pass to Buyer at the                                     
                  F.O.B. point designated on the face of this Order but                                  
                  only after inspection and acceptance of the goods by                                   
                  Buyer in accordance with the terms of this Order. * * *                                
            Furthermore, the purchase order warranted that AEI conveyed good                             
            title to the electronic materials to the customer.  These                                    
            provisions provide clear evidence of AEI's intentions and govern                             
            the passage of title.  See Epic Metals Corp. & Subs. v.                                      
            Commissioner, T.C. Memo. 1984-322, affd. without published                                   
            opinion 770 F.2d 1069 (3d Cir. 1985).                                                        
                  Petitioners also rely on Simon v. Commissioner, 176 F.2d 230                           

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