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named as manager of the annuity trust. Petitioner controlled the
trust and was a signatory on the trust bank accounts.
On August 17, 1994, the annuity trust sold the property and
assets of the pizza business to Jerry Beagley (Beagley) and
Douglas Lundell (Lundell) for a price of $152,000. The $152,000
total stated sales price was to be paid by Beagley and Lundell as
follows: $50,000 as a cash downpayment, assumption of a $15,556
loan, and monthly payments of $1,516 until the balance of $86,444
is fully paid.
In 1994, Beagley and Lundell paid to the trust the $50,000
cash downpayment plus $6,063 reflecting 4 months of installment
payments. The amount of installment payments made by Beagley and
Lundell after 1994 to the annuity trust is not in evidence.
In 1994, funds were distributed by the annuity trust to
petitioner's children as beneficiaries of the annuity trust. The
specific amount of funds distributed by the annuity trust to
petitioner's children is not in evidence.
In 1995 and later years, petitioner received fees from Orr
for referring to Orr various individuals for establishment of
other annuity trusts.
Petitioner timely filed his 1994 individual Federal income
tax return, and petitioner did not report thereon any income
relating to transfer of the pizza business to the annuity trust
or relating to sale of the pizza business to Beagley and Lundell.
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Last modified: May 25, 2011