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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,
supra.
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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