Andrew E. Blanche, Jr., and Cynthia D. Blanche - Page 20

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          date of the contract, rather than the closing date.  The                    
          purchaser agreed to lease back the property to the seller, for              
          agricultural purposes, for an annual cash rent of $2,500, which             
          was accomplished.  At closing, the purchaser was credited an                
          amount of rent for the farm for the precise number of days from             
          execution of the contract to the closing date.  Additionally, the           
          purchaser paid interest on his note to seller from the date of              
          the contract.  Considering all the aforementioned facts, the                
          Fifth Circuit stated that the contract with the addendum and the            
          "conduct of the parties reveal that for all practical purposes *            
          * * [the purchaser] was possessed of the benefits and burdens of            
          ownership at the critical time [i.e., execution of the                      
          contract]."  Boykin v. Commissioner, supra, at 894.                         
               In sharp contrast, the earnest money contract in the instant           
          case expressly provided:                                                    

               taxes, flood and hazard insurance * * * , rents,                       
               maintenance fees, interest on any assumed loan and any                 
               prepaid unearned mortgage insurance premium which has                  
               not been financed as part of any assumed loan * * *                    
               shall be prorated through the Closing Date.  If Buyer                  
               elects to continue Seller’s insurance policy, it shall                 
               be transferred at closing. [Emphasis added.]                           

          Additionally, the contract provided that, if the Foxbriar                   
          property was damaged or destroyed by fire or other casualty, the            
          Hewitts were to restore the property to its previous condition no           
          later than the closing date.  In other words, until the time of             

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Last modified: May 25, 2011