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duty to maintain the property; (3) were responsible for insuring
the property; (4) bore the risk of loss of the property; (5) were
obligated to pay taxes, assessments, and charges against the
property; (6) had the right to improve the property without the
seller’s consent; and (7) had the right to obtain legal title at
any time by paying the balance of the purchase price. See Derr
v. Commissioner, 77 T.C. 708, 724-725 (1981); Ryan v.
Commissioner, T.C. Memo. 1995-579. Petitioners had the right to
possess the property but were prohibited from renting out or
subleasing the property. Petitioners had a duty, as lessees, to
maintain the property in a reasonable condition and to repair
certain damage caused by them; however, petitioners were not
required to insure the property or bear the risk of loss.
Petitioners were not obligated to pay taxes, assessments, or
charges against the property, nor did they have the right to
improve the property without written consent. Analyzing these
factors, petitioners did not possess the benefits and burdens of
ownership prior to August 1992. See also Koehler v.
Commissioner, T.C. Memo. 1978-381.
On this record, the Court finds that petitioners were mere
lessees of the Foxbriar property and did not have the benefits
and burdens of ownership so as to make them equitable owners of
the property until August 1992, the time at which they assumed
liability to Lomas Mortgage. Thus, on this record, the Court
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