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O'Neill v. Commissioner, 994 F.2d 302 (6th Cir. 1993), revg. 98
T.C. 227 (1992), and pointing out the fiduciary obligations
imposed upon the trustees, petitioner contends that the expenses
would not have been incurred if the property were not held by the
trust. Under petitioner's theory of the case, because pursuant
to section 67(e) the expenses are taken into account in computing
adjusted gross income, the provisions of section 67(a) are not
applicable.
We turn our attention first to the status of the trust for
Federal income tax purposes. In petitioner's brief, as a general
criticism of respondent's position, and with reference to the
trust restrictions on the distribution of corpus, petitioner
states: "[respondent] fails to note that in the instant case
although the form of * * * [the trust] is that of a grantor's
trust, in substance it is similar to an irrevocable trust or
mutual fund." According to petitioner, we should consider the
trust as other than a grantor trust. Petitioner's reliance upon
section 67(e) and O'Neill v. Commissioner, supra, is consistent
with treating the trust as other than a grantor trust. However,
such treatment is inconsistent with the stipulation of facts, in
which petitioner agreed not only that the trust "is a grantor
trust", but further, in apparent reliance upon section 671, that
"each item of income and expense [of the trust] is reported
individually by the grantor". Considering the trust as other
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