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2. The Super Trust
a. Formation and Purpose
On March 31, 1988, E.S. Gustafson formed Gustafson's Dairy
Farm Super Trust (the Super Trust) to induce petitioner's
shareholders to make some of their personal assets available to
petitioner to help meet petitioner's long-term financial needs
(i.e., 5 to 20 years in the future) and to hold petitioner's
voting stock. E.S. Gustafson was the grantor and individual
trustee. The Florida National Bank (later First Union National
Bank of Florida) was the corporate trustee. Petitioner's board
authorized the creation of the Super Trust. Tax considerations
were not a factor when petitioner established the Super Trust.
The Super Trust agreement charged the trustee of the Super
Trust with determining the highest and best use of petitioner's
8,000 acres and other land to be acquired by petitioner, deciding
the size of the dairy herd and whether to split the dairy herd
into smaller herds, and making decisions concerning the
distribution of petitioner's products. The Super Trust did not
manage petitioner and was not concerned with meeting petitioner's
short-term (5 years or less) needs.
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