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Code sec. 15207 (West 1991). A trust may be created by a
declaration by the owner of property, by the transfer of property
to a third person as trustee, or by an enforceable promise to
create a trust. Cal. Prob. Code sec. 15200 (West 1991). The
essential elements of a trust under California law are: (1) A
manifestation of an intention by the settlor to create a trust;
(2) trust property; (3) a lawful purpose for the trust; and (4)
an identified beneficiary. Cal. Prob. Code secs. 15200-15205
(West 1991); Osswald v. Anderson, 49 Cal. App. 4th 812, 818, 57
Cal. Rptr. 2d 23, 26 (1996). The creation of a trust is not
determinative of whether or not petitioner had constructive
receipt of the guaranteed tuition when paid by the students. A
cash basis taxpayer has constructive receipt of funds paid into
an escrow or trust account upon deposit unless the taxpayer’s
control over the money in the account is subject to substantial
limitations or restrictions. Stiles v. Commissioner, 69 T.C.
558, 563 (1978); sec. 1.451-2, Income Tax Regs.
Petitioner did not establish a trust account with the
$30,000 guaranteed tuition. Petitioner contends that he created
a trust account at World Savings and that he held the tuition in
that account until the students passed the bar examination. The
World Savings account was in petitioner’s name and was not
designated as a trust account. No deposits were made to that
account after 1990. Petitioner never deposited the tuition from
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