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convinced that Arivada or Chisum had legal title to petitioner's
business.
Petitioner contends that East Point and S A Finance are
beneficiaries of Arivada and that an economic interest passed to
them from Arivada. The record does not support his contention.
Petitioner did not offer any credible evidence showing that East
Point had a beneficial or economic interest in Arivada in 1993 or
1994, that East Point's alleged beneficial interest in Arivada
changed from 100 percent in 1993 to 80 percent in 1994, that S A
Finance had a beneficial interest in Arivada in 1994, that East
Point and S A Finance had employer identification numbers, or
that Arivada distributed to East Point or S A Finance any money
or property as a result of this beneficial interest.
Jones-George believed that Chisum could control those assets
if she and petitioner transferred them to Arivada. However, the
fact that she believed the trust would have substance does not
mean that it did.
3. Whether Arizona Law Determines Whether Arivada Is a
Sham for Federal Tax Purposes
Petitioner contends that, under sections 643, 651, and 652
of the Internal Revenue Code, Arizona law controls whether
Arivada is a sham for Federal tax purposes. Petitioner contends
that, under Arizona law, the person claiming that the trust or
other entity is not valid bears the burden of proof. We disagree
that Arizona law controls here. We need not recognize an entity
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