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1988. He also received payments from other Mohney Group
corporations that he managed under the title of “consultant” in
every year between 1985 and 1991. If the reward he expected was,
as respondent contends, a return on his investment, then he
expected not only the appreciation in equity value resulting from
his efforts, but also distribution of some of the earnings. Thus
respondent’s argument implies that Mohney expected that he could
withdraw earnings from petitioner just as if he had owned a
controlling interest in the corporation directly, rather than a
beneficial interest in the trust that owned petitioner’s
shareholders.
The little evidence we have concerning the Amaranta Trust
does not support this conclusion. Mohney testified that he
established the trust for the benefit of his children and
grandchildren; although he too possesses a beneficial interest,
the trust is structured in such a way that he cannot realize any
tangible benefit during his lifetime. This would suggest that
Mohney does not have--or is not aware of having--a right to
distribution of current income or right to withdraw income or
corpus. Therefore earnings of petitioner that Mohney did not
cause to be paid out as compensation would not have come back to
him through distributions from the trust. Presumably a
substantial share would have accrued to the other beneficiaries.
And any share of the trust’s dividend income to which he may have
been entitled would have been accumulated; he would not have been
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