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We determine property rights of the parties under State law
(in this case, California, see supra p. 3) in order to provide
the foundation for deciding the Federal tax consequences thereof.
Helvering v. Stuart, 317 U.S. 154, 162 (1942); Estate of Heim v.
Commissioner, 914 F.2d 1322, 1327 (9th Cir. 1990), affg. T.C.
Memo. 1988-433; see also United States v. Irvine, 511 U.S. ,
114 S. Ct. 1473, 1481 (1994). We apply California law as
announced by the Supreme Court of California, or, if there is no
decision by that highest court, we apply what we conclude that
court would decide, giving proper regard to the decisions of
other courts of the State. Commissioner v. Estate of Bosch, 387
U.S. 456, 465 (1967).3
Petitioners argue that the trust document did not validly
create the trust because of the absence of Schedule A and that
therefore the trust fails for lack of trust property. Proceeding
from this conclusion, petitioners argue that, by virtue of the
purchase agreement, McCormick and Furman acquired the property as
individuals and then, by virtue of their signatures on the trust
document and their designation as trustees in the purchase
agreement, constituted themselves trustees for the Meek
beneficiaries and consequently they, and not Meek, were the
settlors.
3 See also Estate of McKay v. Commissioner, T.C. Memo. 1994-362.
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