David C. Hutchinson, et al. - Page 24

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               Respondent argues that the failure of VRI and VCI to adhere            
          strictly to the terms of the Contract indicates that VRI and VCI            
          did not regard the Contract as binding and that we should                   
          disregard the terms of the Contract.  We disagree.  The deed to             
          the Clubhouse was transferred into escrow before the placed-in-             
          service date of July 19, 1996, the relevant date for purposes of            
          establishing in these cases ownership of and a depreciable                  
          interest in the Clubhouse.  The fact that the deed to the                   
          Clubhouse was not transferred into escrow until shortly before              
          completion of construction is not particularly significant.                 
          Also, in light of the indicia of ownership set forth above, the             
          fact that a formal written lease of the Clubhouse between VRI and           
          VCI was not executed during the transition period is not                    
          particularly significant.  We believe that the terms under which            
          the Clubhouse would be operated during the transition period as             
          between VRI and VCI were adequately set forth in the Contract,              
          and respondent has pointed us to nothing that represents a                  
          failure to adhere to that agreement in any substantial way.                 
               Respondent relies on language in the 1999 settlement                   
          agreement between VRI, petitioners, VCI, and members of VCI as              

               Turnover Date is defined as of the date when all                       
               documents necessary to carry out this agreement are                    
               removed from escrow * * * and ownership, possession,                   
               and control of the property * * * is actually                          
               transferred from VRI to VCI.                                           

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