Forest L. Buckmaster - Page 11

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            ascertain whether a purported trust lacks economic substance for                             
            Federal income tax purposes.  These factors include:  (1) Whether                            
            the taxpayer's relationship, as grantor, to the property differed                            
            materially before and after the trust's formation; (2) whether                               
            the trust had an independent trustee; (3) whether an economic                                
            interest passed to other beneficiaries of the trust; and                                     
            (4) whether the taxpayer felt bound by any restrictions imposed                              
            by the trust itself or the law of trusts. Zmuda v. Commissioner,                             
            79 T.C. 714, 720-722 (1982), affd. 731 F.2d 1417 (9th Cir. 1984);                            
            Markosian v. Commissioner, supra at 1243-1245; Hanson v.                                     
            Commissioner, T.C. Memo. 1981-675.  Our analysis of each of these                            
            factors supports our conclusion.                                                             
                  With respect to the first factor, we look to the economic                              
            reality of a purported arrangement to determine who actually is                              
            the settlor of a trust, whether or not named as settlor in the                               
            related documents.  Zmuda v. Commissioner, supra at 720.                                     
            Although the documents at hand list Cache as the settlor of Ideal                            
            Management, the fact of the matter is that Cache acted merely as                             
            a "straw man" to form Ideal Management.  See United States v.                                
            Scott, 37 F.3d at 1570.  We find that petitioner paid a $2,500                               
            fee to transfer his assets to Ideal Management, and that Ideal                               
            Management's only assets during 1992 were petitioner's                                       
            transferred assets including, possibly, the residence.  We find                              
            that petitioner used all of these properties as his own both                                 
            before and after the transfer; i.e., he used his tools and                                   
            vehicles to generate large revenues, and he and Webb lived in the                            

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