Salvador A. and Kathleen M. Gaudiano - Page 9

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          combination of factors, is absolutely determinative.  Cal-Maine             
          Foods, Inc. v. Commissioner, T.C. Memo. 1977-89; see also Western           
          Contracting Corp. v. Commissioner, 271 F.2d 694 (8th Cir. 1959);            
          Benton v. Commissioner, 197 F.2d 745 (5th Cir. 1952); Haggard v.            
          Commissioner, 24 T.C. 1124 (1955), affd. per curiam 241 F.2d 288            
          (9th Cir. 1956).                                                            
               In Grodt & McKay Realty, Inc. v. Commissioner, supra at                
          1237-1238, we listed several factors considered by courts in                
          determining whether the benefits and burdens of ownership have              
          been transferred.  The factors considered were:                             
               (1) Whether legal title passes; (2) how the parties                    
               treat the transaction; (3) whether an equity was                       
               acquired in the property; (4) whether the contract                     
               creates a present obligation on the seller to execute                  
               and deliver a deed and a present obligation on the                     
               purchaser to make payments; (5) whether the right of                   
               possession is vested in the purchaser; (6) which party                 
               pays the property taxes; (7) which party bears the risk                
               of loss or damage to the property; and (8) which party                 
               receives the profits from the operation and sale of the                
               property.  [Citations omitted.]                                        
                    1.  Whether Legal Title Passed                                    
               We look to State law to determine whether a taxpayer has an            
          ownership interest in property.  See United States v. National              
          Bank of Commerce, 472 U.S. 713 (1985).  Under Kentucky law,                 
          "title to goods passes * * * in any manner and on any conditions            
          explicitly agreed on by the parties."  Ky. Rev. Stat. Ann. sec.             
          355.2-401(1) (Michie 1996).  Petitioners argue that under the               
          agreement Four A granted, sold, and conveyed all of its right,              





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