Andrew E. Blanche, Jr., and Cynthia D. Blanche - Page 15

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               However, a taxpayer becomes the equitable owner of property            
          when he assumes the benefits and burdens of ownership.  See Baird           
          v. Commissioner, 68 T.C. 115, 124 (1977).  The time at which a              
          taxpayer has assumed the benefits and burdens of ownership is a             
          question of fact in each case.  See Koehler v. Commissioner,                
               Petitioners contend that they were equitable owners of the             
          Foxbriar property during both of the years at issue.  Petitioners           
          argue that they had an option contract with the Hewitts for the             
          purchase of the Foxbriar property, which became an executory                
          contract for sale/purchase upon petitioners’ exercise of their              
          option.  At that time, petitioners argue, they became equitable             
          owners of the Foxbriar property.  Petitioners contend they became           
          equitable owners of the property no later than June 30, 1991, by            
          their acts of "signing the earnest money contract and paying the            
          $100 and $2,500, setting the closing date, and subsequent acts of           
          making all monthly payments and paying the additional $1,500".              
          Petitioners contend that this argument is fortified by the fact             
          that they took possession of the property in June 1990 and                  
          maintained possession through 1997.  In support of their claim to           
          equitable title, petitioners rely on the Texas Supreme Court case           
          of Sinclair Ref. Co. v. Allbritton, 218 S.W.2d 185 (Tex. 1949).             
               Petitioners’ reliance on the Sinclair Ref. Co. case is                 
          misplaced.  The contract at issue in Sinclair Ref. Co. was a                
          lease contract containing a purchase option clause, which gave              

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