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sham without effect for Federal income tax purposes.
* * *
Respondent counters:
A fundamental principle of income tax law is that
economic substance prevails over form, and in this case
the real estate transactions between petitioners were
without economic substance because petitioner Havens
remained the true owner of the equity in the proper-
ties. * * *
* * * * * * *
It is abundantly clear that the real estate transac-
tions between Havens and Delaware Corporation are
without economic substance. Havens always remained in
possession of the properties and controlled the proper-
ties as she had done before the transfers. Once the
Court looks through the alleged transfer to Delaware
Corporation, no economic relationships were altered,
and Havens remained the owner of the Virginia Beach and
Caroline County properties.
On the record before us, we reject petitioners’ argument
that as of August 1, 1993, or any time thereafter during the
years in question, Ms. Havens transferred the Caroline County
farm and the Virginia Beach property to Delaware Corporation and
that Delaware Corporation became the owner of those properties.
On that record, we agree with respondent that during the years in
question Ms. Havens remained the owner of both of those proper-
ties.
In determining whether the benefits and burdens of ownership
of the Caroline County farm and of the Virginia Beach property
passed from Ms. Havens to Delaware Corporation, we look to Keith
v. Commissioner, 115 T.C. 605 (2000), for guidance. In Keith v.
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