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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) whom
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