Kenneth L. Musgrave and Etta D. Musgrave - Page 6




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            What Was Conveyed?                                                                         
                  State law controls the determination of the nature of the                            
            property interest the taxpayer conveyed.  See United States v.                             
            National Bank of Commerce, 472 U.S. 713, 722 (1985) (citing and                            
            quoting Aquilino v. United States, 363 U.S. 509, 512-513 (1960)).                          
            In order to determine the property rights transferred by the                               
            contract for deed we must therefore look to Texas property law.                            
                  In determining what the relevant State law is “the State’s                           
            highest court is the best authority on its own law.”                                       
            Commissioner v. Estate of Bosch, 387 U.S. 456, 465 (1967).  The                            
            decision of an “intermediate appellate state court ... is a datum                          
            for ascertaining state law which is not to be disregarded”,                                
            unless the Federal court is convinced that the State’s highest                             
            court would decide differently.  Id.  The decrees of “lower state                          
            courts should be attributed some weight”, but their decisions are                          
            not controlling where the highest court of the State has not                               
            spoken on the point.  Id. (quotation marks and citation omitted).                          
            State Law                                                                                  
                  Petitioner and respondent cite seemingly conflicting lines                           
            of authority in setting out their respective positions on what                             
            rights a purchaser acquires under a contract for deed in Texas.                            
                  Respondent relies on a line of cases that starts with                                
            Johnson v. Wood, 157 S.W.2d 146 (Tex. 1941) (an opinion adopted                            








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