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Sabastin’s names. Therefore, petitioner must establish
beneficial or equitable ownership in the Bronx Boulevard house in
order to be entitled to deduct any mortgage interest payments.
See Daya v. Commissioner, supra; Trans v. Commissioner, T.C.
Memo. 1999-233; Uslu v. Commissioner, T.C. Memo. 1997-551.
State law determines the nature of property rights, and
Federal law determines the tax consequences of those rights.
United States v. Natl. Bank of Commerce, 472 U.S. 713, 722
(1985); Blanche v. Commissioner, T.C. Memo. 2001-63, affd. 33
Fed. Appx. 704 (5th Cir. 2002). Under New York law, a purchaser
of property becomes the equitable owner upon entering into a
contract for sale of the property. Dubbs v. Stribling &
Associates, 712 N.Y.S.2d 19 (App. Div. 2000), affd. 752 N.E.2d
850 (2001); Edwards v. Van Skiver, 681 N.Y.S.2d 893 (App. Div.
1998). Petitioner has not alleged, and we find no evidence in
the record, that petitioner ever gained an equitable ownership
interest in the Bronx Boulevard house. Petitioner offered no
evidence that his father or Mr. Sabastin ever entered into an
agreement that would entitle petitioner to an ownership interest
in the house. Therefore, we find that petitioner was not an
equitable owner of the Bronx Boulevard house during 2003.
Furthermore, petitioner’s situation is not similar to cases
where we have held that even though the taxpayer’s family member
secured the mortgage as an accommodation, the deduction was
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