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principal of this Trust as reasonably needed to assist
the * * * [petitioner] in starting and operating any
lawful profession or business which, in the reasonable
opinion of the Trustees, will be a profitable venture
of the * * * [petitioner].
The Will further stated that
It is to be understood by my Personal Representatives
and Trustees that the primary purpose to be considered
throughout this Last Will and Testament and in
connection with any ambiguities or questions which may
arise under any of its terms is to provide for the
benefit of my son, JONATHAN B. GEFTMAN. No action
should be taken by my Personal Representative and
Trustees which would unreasonably detract from my son's
ability to receive the maximum income and principal to
which he is entitled under the terms of this Last Will
and Testament.
In August 1983, the Personal Representatives transferred
approximately $3 million of tax-free municipal bonds to brokerage
accounts at E.F. Hutton and Paine Webber, titled in the names of
the trusts.4 The trusts earned $252,408 of nontaxable interest
on these funds during their taxable year ended February 28, 1985.
From December 1983 through September 7, 1984, the trustees
borrowed funds on margin from the same brokerage accounts and
transferred the funds to the estate, utilizing the municipal
bonds as collateral. The total borrowing on margin, as of
August 31, 1984, was $2,850,408.
The trusts lent all of the funds received from this
borrowing on margin to the estate or corporations owned by the
4 All beneficiaries under Trust A, Trust B, and Trust C
provided consents authorizing this transfer of municipal bonds.
Since petitioner was a minor at the time of the transfer, his
mother executed a consent on his behalf.
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