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the parties treat as possessing the benefits and burdens of
ownership; (3) who has equity in the property; (4) whether the
taxpayer has a present obligation to execute and deliver a deed
and whether the purchaser has a present obligation to make
payments; (5) who has the rights of possession to the property;
(6) who pays the property taxes; (7) who bears the risk of loss
or damage to the property; and (8) who receives the profits from
the operation and sale of the property. See Grodt & McKay
Realty, Inc. v. Commissioner, supra at 1237-1238.
Ownership of real property may be transferred even though
title thereto is retained by the seller or is in escrow for
security purposes. See Clodfelter v. Commissioner, 48 T.C. 694,
700 (1967), affd. 426 F.2d 1391 (9th Cir. 1970).
On July 10, 1996, prior to the time the Clubhouse was placed
in service, VRI transferred into escrow title to the Clubhouse.
Thereafter, during the transition period, title to the Clubhouse
was held in escrow in VCI’s name. VCI stood to benefit from an
increase in the fair market value of the Clubhouse, and VCI would
suffer economically for any decrease in the fair market value of
the Clubhouse.
Also during the transition period, VCI was obligated and did
pay for the insurance relating to the Clubhouse.
Transfer to VCI of legal title to the Clubhouse was
scheduled to occur no later than December 31, 2000, regardless of
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