- 20 - in 1994 through July 18, 1996, VRI did not have an interest in the Clubhouse properly recoverable through depreciation, and we reject respondent’s contention that because VRI allegedly had an ownership interest in the Clubhouse during construction, VRI is not qualified to allocate estimated Clubhouse construction costs under the alternative cost method. The question of whether VRI would have been able to recover its Clubhouse construction costs through depreciation because it allegedly had a depreciable interest in the Clubhouse during the transition period (namely, on or after the Clubhouse was placed in service on July 19, 1996, and until April 21, 1999, the date the deed to the Clubhouse was transferred out of escrow to VCI), turns on an analysis of the benefits and burdens relating to ownership of the Clubhouse during the transition period. See Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221, 1235- 1238 (1981). Who possesses the benefits and burdens of ownership of property constitutes a question of fact which is generally ascertained from the intentions of the parties as evidenced by the written agreements read in light of all the relevant facts and circumstances. See Durkin v. Commissioner, 87 T.C. 1329, 1367 (1986), affd. 872 F.2d 1271 (7th Cir. 1989). Some of the factors used by courts in analyzing whether taxpayers possess the benefits and burdens of ownership of property are: (1) Who has legal title to the property; (2) whomPage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
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