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able to realize this gain without selling all or part of his
interest in the trust. If the trustee had arranged for
petitioner to distribute dividends so that the funds could then
be distributed by the trust to Mohney, he would likely have been
acting in violation of his legal obligations. As a practical
matter, Mohney could not have compelled Newlands to distribute
trust income to him, for Mohney had no power to discharge
Newlands. If Newlands retired, he would select his own
successor. In the absence of any basis for doubting the
independence and integrity of the trustee, we are unwilling to
assume that Mohney expected him to act in derogation of his
duties. The implications of respondent’s argument seem therefore
to be at variance from the facts. The payments that Mohney
claims to have expected to receive as compensation for his
services and which he ultimately received in 1988 and 1991
differed materially from the returns he received on his
investment through the trust.
Respondent points out that petitioner paid Deja Vu for
consulting work during the years at issue, and that Mohney was
employed by Deja Vu. Therefore, if Mohney did sell his services
to petitioner, those services were likely to have been fully
compensated through Deja Vu’s regular billings.
According to the uncontradicted testimony of Krontz, who
served as both petitioner’s manager and the president of Deja Vu,
the consulting work that Deja Vu performed for petitioner did not
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