Lowry

MEMORANDUM **

Robert and Dawn Lowry appeal the tax court’s ruling affirming tax deficiencies and penalties assessed by the Commissioner for tax years 1994 and 1995. In particular, they appeal: 1) the tax court’s ruling that they must report 26 U.S.C. § 1231 gain from a property conveyance by Robert Lowry’s partnership in 1994 rather than in 1993 and 2) the tax court’s affirmance of 26 U.S.C. § 6662 (a) accuracy penalties for underpayment of taxes in 1994 and 1995. We have jurisdiction pursuant to 26 U.S.C. § 7482 and affirm.

We review de novo the tax court’s conclusions of law. Baizer v. Comm’r, 204 F.3d 1231, 1233-34 (9th Cir.2000). We review for clear error the tax court’s factual findings regarding accuracy penalties. Custom Chrome, Inc. v. Comm’r, 217 F.3d 1117, 1121 (9th Cir.2000).

The parties submitted this case to the tax court on stipulated facts, and we do not repeat them here. The tax court correctly held that the Fitch property transaction closed in 1994 and therefore that the resulting gain was recognizable in that year. Under California law, mere delivery of an instrument in escrow does not convey title. In re Ghrisman, 35 F.Supp. 282, 283 (S.D.Cal.1940). Rather,…