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adversely affected by exercise of the power for the grantor's
benefit. The presumption is that there is a sufficient
likelihood that the holder will exercise his power for the
benefit of the grantor unless it would be detrimental to his own
interests to do so. Id. at A212; 3 Bittker & Lokken, Federal
Taxation of Income, Estates and Gifts, par. 80.1.3, at 80-13 (2d
ed. 1991).
We do not agree with petitioners that the investment income
earned by the PLRF is “homeless income” whose taxation must be
deferred until its ultimate disposition is determined. At the
inception of the PLRF its owners were identifiable under the
grantor trust rules.
In the previous section of this Opinion, we concluded that
the PLRF is classified as a trust for Federal income tax
purposes. The Dealerships were the grantors of the trust because
it was they who supplied the trust property. As explained in the
previous section, unlike the preneed funeral arrangement under
which the funeral home acted as a mere conduit in transferring
trust property from its customers, the money collected from VSC
purchasers did not constitute identifiable trust property before
it left the hands of the Dealerships. Cf. Buhl v. Kavanagh, 118
F.2d at 319; Smith v. Commissioner, 56 T.C. 263, 289-291 (1971).
Pursuant to the Administrator Agreement, the PLRF was established
to fund the Dealerships' obligations under the VSC's. All income
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