J. Ramsay Farah and Elizabeth Farah - Page 26
mortgage was on the Berlin house. Furthermore, it is unlikely a
lender would require a change in ownership, but not require that
the change be reflected by recordation of a deed of transfer.
Maryland law recognizes that ownership of property may be,
either formally or informally, separated from title to property.
Vlamis v. De Weese, 140 A.2d 665 (Md. 1958). However, we cannot
treat lightly the formal manner in which property is held, lest
we subject legal titles to unnecessary uncertainties and
complicate the administration of law. Estate of Rosenblatt v.
Commissioner, T.C. Memo. 1977-12.
Petitioners had approximately 10 years in which to record
the change in ownership of the South Point Road lot, but they did
not. Petitioners contend they had been the owners of the lot
since 1992. However, when selling the property they listed the
Family Partnership as its owner. It was not until petitioners
realized ownership of the property through the Family Partnership
produced adverse tax consequences that they held themselves out
as the owners of the property. Petitioners were free to organize
their affairs as they chose; nevertheless, having done so, they
must accept the tax consequences of their choices, whether
contemplated or not. See Commissioner v. Natl. Alfalfa
Dehydrating & Milling Co., 417 U.S. 134, 149 (1974).
For the foregoing reasons, we hold that petitioners have
failed to meet their burden of proving they were the owners of
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Last modified: March 27, 2008