Susan L. Bay - Page 2

                                        - 2 -                                         

               Respondent determined deficiencies in petitioner's 1993 and            
          1994 Federal income taxes in the amounts of $3,370 and $1,196,              
          respectively.  The issue for decision is whether certain                    
          miscellaneous itemized deductions attributable to a grantor trust           
          are subject to section 67(a).                                               
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          Petitioner filed timely 1993 and 1994 Federal income tax returns.           
          She resided in Omaha, Nebraska, at the time the petition was                
          filed.                                                                      
               Petitioner is a grantor and beneficiary of the Jay Newlin              
          Trust (the trust).  The trust was created on December 11, 1976,             
          in order to preserve financial security for the grantors, more              
          efficiently manage their investments, and gain financial                    
          advantages for the beneficiaries.  Although certain restrictions            
          apply to distributions of corpus, for Federal income tax                    
          purposes, the trust is what is commonly referred to as a grantor            
          trust.  See generally sections 671 through 679.                             
               During the years at issue, the trust corpus was valued at              
          approximately $200 million, of which petitioner's interest was              
          approximately 2.9 percent.  The trust was administered by three             
          trustees, none of whom had any expertise in the management of a             
          large investment portfolio.  In order to assist them in making              
          financial and other investment decisions, the trustees retained             





Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011