- 17 -
Realty Associates, Inc., supra. In either case, if the buyer
were to default and refuse to complete the transaction, the
seller would have no further recourse against the buyer
personally. The seller could look only to the property itself as
a means to recover the full value of the aborted deal and would
be unable to enforce remaining payments or deficiencies against
the buyer as a personal liability. Yet, the court still
characterized the Chilivis instrument as creating an equitable
interest in the buyer and leaving the seller with a mere security
interest. Hence, we do not believe that Georgia courts would
hold a lack of recourse against the purchaser, following default
of an otherwise binding agreement, to prevent a finding that the
benefits and burdens of ownership, i.e., an equitable interest,
were nonetheless transferred when the contract was signed.
Accordingly, the sale should be considered complete for tax
purposes, regardless of the possibility of future voidance.
The foregoing conclusion is further buttressed by the
weight, or lack thereof, that other courts have given to various
types of nonrecourse clauses in evaluating the completeness of a
sale. For instance, the sales agreement at issue in Commissioner
v. Baertschi, 412 F.2d 494, 497 (6th Cir. 1969), revg. 49 T.C.
289 (1967), contained the following language:
The remedy or recourse of said parties of the first
part for the non-performance of any obligation of the
parties of the second part hereunder shall be limited
solely to the moneys paid hereunder, and to the herein
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