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(and, derivatively, the donees) in those cases “had virtually no
control over the course of events once the corporation's plan of
complete liquidation had been adopted”); Palmer v. Commissioner,
62 T.C. at 695 (noting that shareholder vote approving redemption
did not occur prior to gift and that donee possessed sufficient
voting power to prevent redemption, we distinguished Hudspeth v.
United States, 471 F.2d 275 (8th Cir. 1972), and Kinsey v.
Commissioner, supra, and stated, “at the time of the gift, the
redemption had not proceeded far enough along for us to conclude
that the foundation was powerless to reverse the plans of the
petitioner”). We found that there was no fixed right to income
in either a legal or an economic sense prior to the gift of the
currency contracts, and, therefore, the gift was not an
anticipatory assignment of income.
An examination of the cases that discuss the anticipatory
assignment of income doctrine reveals settled principles. A
transfer of property that is a fixed right to income does not
shift the incidence of taxation to the transferee. The reality
and substance of a transfer of property govern the proper
incidence of taxation and not formalities and remote hypothetical
possibilities. In determining the reality and substance of a
transfer, the ability, or the lack thereof, of the transferee to
alter a prearranged course of disposition with respect to the
transferred property provides cogent evidence of whether there
existed a fixed right to income at the time of transfer.
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