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whether a particular transaction constitutes a sale turns on
whether the benefits and burdens of ownership have passed from
seller to buyer. See Grodt & McKay Realty, Inc. v. Commissioner,
supra. This inquiry is factual and is determined from the
intention of the parties, as evidenced by the written agreements
read in light of the attendant facts and circumstances. See
Haggard v. Commissioner, 24 T.C. 1124, 1129 (1955), affd. 241
F.2d 288 (9th Cir. 1956).
Various factors to consider in making a determination as to
whether a sale has occurred have been summarized as follows:
(1) Whether legal title passes; (2) how the parties treat the
transaction; (3) whether 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. See Grodt & McKay
Realty, Inc. v. Commissioner, supra at 1237-1238. An additional
factor to be weighed is the presence or absence of arm's-length
dealing. See Falsetti v. Commissioner, 85 T.C. 332, 348 (1985)
(citing Estate of Franklin v. Commissioner, 64 T.C. 752 (1975),
affd. 544 F.2d 1045 (9th Cir. 1976)).
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