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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.
CDC did not receive the benefits and burdens of ownership of
Phase II upon execution of the Agreement. There is no evidence
that CDC ever had possession of Phase II. Furthermore, as stated
in the Agreement, petitioners were still liable for the payment
of taxes and insurance on Phase II until the closing of escrow.
CDC did not have full legal title at the time the Agreement was
executed. Under California law, delivery and acceptance of a
deed passes full legal title. Cal. Civ. Code sec. 1056 (West
1982). According to the Agreement, petitioners were to retain
the deed until no later than the business day preceding the close
of escrow, at which time they were to deposit into escrow the
deed conveying title to CDC in fee simple.
An earnest money deposit, received on the execution of a
sales contract, is not income until the taxpayer acquires an
unconditional right to retain the deposit. Bourne v.
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