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pizza business to the annuity trust in exchange for a joint and
survivor annuity.2
Under provisions of the annuity contract, petitioner and his
wife are not to begin receiving annuity payments until
November 15, 2023. Thereafter, petitioner and his wife are to
receive $4,734 a month for the remainder of their lives. The
annuity trust, however, is entitled to make current distributions
of trust property to the named beneficiaries of the trust who
were all members of petitioner's family.
In documents associated with transfer of the pizza business
to the annuity trust, the pizza business is stated to have a
value of $152,000, and petitioner is stated to have a tax basis
in the business of $75,376.
David J. Orr (Orr) and Barry Crosby (Crosby), employees of
Financial Planning Co., were named as trustees of the annuity
trust, but they were not independent, and they did not function
in any meaningful way as trustees of the trust. Petitioner was
2 There is some evidence in the record that indicates that
petitioner's pizza business was owned by a closely held
corporation, the stock in which was owned by petitioner and his
wife, and that the transfer of the pizza business to the annuity
trust took the form of a stock transfer. Other evidence,
however, indicates that the transfer of the pizza business to the
annuity trust took the form of a transfer of the underlying
property and assets of the business. Petitioner does not dispute
respondent's treatment of the transfer as a transfer of the
underlying property and assets.
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Last modified: May 25, 2011