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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 be
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