- 14 - prevent Mr. Christal from using United Sovereigns' property for his own purposes. As to the third factor, we find no probative evidence in the record to indicate that petitioners transferred an economic interest to a third party. Based on our review of the record, we are satisfied that petitioners are the beneficiaries of United Sovereigns. As to the fourth factor, we find that Mr. Christal was not in practice bound by any restrictions imposed by United Sovereigns' trust instrument or the law of trusts as to the use of the transferred property. His unrestricted use of United Sovereigns' property leads us to believe that Mr. Christal was not in fact restricted in any meaningful manner, including fiduciary restraints. Additionally, petitioners presented no credible evidence that any purpose other than tax avoidance was served by the entity to which Mr. Christal transferred his business activities. From the foregoing, we conclude there was no nontax purpose for the creation of United Sovereigns, and in accordance with Markosian v. Commissioner, supra, and the numerous opinions relying thereon, we conclude that United Sovereigns lacked economic substance for Federal tax purposes. Accordingly, we hold that the trust structure of United Sovereigns shall not bePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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