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nonadverse trustee, Kanter, as the true grantor, would also be
taxable on the income of BRT.
We think Kanter failed to establish that he was not the true
grantor of BRT in 1986 and 1987. Because of this and his failure
to establish that the beneficial enjoyment of any portion of BRT
was not subject to a power of disposition, within the meaning of
section 674, we agree with respondent that he should be treated
as the owner of BRT and taxable on the income of the trusts in
those years. See Schulz v. Commissioner, 686 F.2d 490 (7th Cir.
1982).
Moreover, under section 3.1 of the trust agreement, Weisgal,
a nonadverse trustee, had the power to distribute the income or
principal among the trust beneficiaries as he deemed in their
best interests. The power to dispose of income is the equivalent
of ownership of it. The power to allocate income among trust
beneficiaries is a power of disposition over beneficial
enjoyment. The power to determine which beneficiary will receive
trust income is the power to affect beneficial enjoyment. A
power exercisable by the grantor or by a nonadverse party to vary
or "sprinkle" income between beneficiaries will result in
taxation of the trust income to the grantor unless one of the
exceptions provided in section 674(b), (c), or (d) applies.
Section 675(3) provides that the grantor is treated as the
owner of any portion of a trust in respect of which the grantor
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