- 44 -
1929), revg. 10 B.T.A. 65 (1928); Ford Dealers Adver. Fund, Inc.
v. Commissioner, 55 T.C. 761, 770-774 (1971), affd. 456 F.2d 255
(5th Cir. 1972); Artnell Co. v. Commissioner, 48 T.C. 411, 417-
418 (1967), revd. on other grounds 400 F.2d 981 (7th Cir. 1968);
Seven-Up Co. v. Commissioner, 14 T.C. 965, 977-978 (1950); Twin
Hills Meml. Park & Mausoleum Corp. v. Commissioner, T.C. Memo.
1954-206. If and to the extent that the contract holder retains
the beneficial interest in the funds collected by the Dealership,
the Dealership is not required to include them in gross income.8
It is therefore necessary to address petitioners' contention
that the contract holder does not relinquish beneficial ownership
of the portion of the contract price allocable to the PLRF. In
other words, we must decide whether the VSC arrangement, like the
preneed funeral arrangement in Angelus Funeral Home and the
arrangement for prepaid legal fees in Miele, provided for
collection of this money in trust for the contract holder's
benefit.
8 Respondent tries to distinguish the cases on which
petitioners rely by further pointing out that in Miele v.
Commissioner, 72 T.C. 284 (1979), the funds in the client trust
account belonged to the client and that in Angelus Funeral Home
v. Commissioner, 47 T.C. 391 (1967), affd. on other grounds 407
F.2d 210 (9th Cir. 1969), the preneed funeral arrangement created
a grantor trust on behalf of the customer. But respondent’s
observations simply beg the question whether the contract holders
in the cases at hand also retain a beneficial interest in the
reserves.
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