Tax Court Rules of Practice and Procedure, unless otherwise indicated.
The issue for decision is whether petitioner is entitled to
amortize a life interest in a trust established for her benefit
incident to a divorce.
All of the facts have been stipulated and are found
accordingly.
Petitioner's legal residence was in Mobile, Alabama, at the
time of the filing of her petition in this case. She timely
filed her Federal income tax returns for the taxable years 1991
and 1992.
Petitioner and Mr. T. K. Jackson III (Mr. Jackson) were
divorced on December 5, 1990. On December 4, 1990, 1 day before
the entry of the divorce decree, Mr. Jackson, as settlor and the
trustee of the AEJ Life Trust (the trust), executed an
irrevocable trust agreement. Approximately 1 month after the
date of the divorce, Mr. Jackson funded the trust with various
securities which had both a cost basis and fair market value of
$598,720.80. The trustees of the trust are petitioner, Mr.
Jackson, Laura H. Jackson, and Ted K. Jackson IV.
The trust agreement, which was incorporated into the
judgment of divorce, provided that petitioner was to receive all
the income of the trust in monthly installments of $3,000 during
her lifetime, if sufficient trust income existed, and any income
in excess of $3,000 per month, semiannually. Upon petitioner's
death, the entire remaining principal of the trust was to be paid
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