Leon L. Zachman and Estate of Ione Zachman - Page 16

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         entitlement to an income tax advantage.  See Prindle Intl.                   
         Marketing, UBO v. Commissioner, T.C. Memo. 1998-164.11                       
              Contending that they received only a share of the Hillside              
         Farm income, petitioners argue that they should be taxed only on             
         the share they actually received.12  It is axiomatic, however,               
         that taxation is concerned with “actual command over the property            
         taxed-–the actual benefit for which the tax is paid” and that the            
         transfer of formal legal title will not operate to “shift the                
         incidence of taxation attributable to ownership of property where            
         the transferor continues to retain significant control over the              
         property transferred.”  Frank Lyon Co. v. United States, 435 U.S.            
         561, 573 (1978); see Sundance Ranches, Inc. v. Commissioner, T.C.            
         Memo. 1988-535, affd. without published opinion (9th Cir. 1990).             
         Petitioners clearly retained sufficient power and control over               
         the farm to be properly treated as the recipients of the income              

               11 On brief, petitioners also argue that creation of the               
          Hillside Farm allowed petitioner to qualify for Social Security             
          without reduction for personal service income.  The record is               
          devoid of evidence regarding any such purpose.  In any event,               
          that petitioners may have wished to evade earned income                     
          restrictions for Social Security purposes scarcely bolsters their           
          case for recognizing the trust for Federal income tax purposes.             
               12 The record does not establish what ultimately happened to           
          the 60 percent of Hillside Farm income allegedly distributed to             
          BBCA.  Cf. United States v. Klaphake, 64 F.3d 435 (8th Cir. 1995)           
          (in a case involving the transfer of a family farm business to a            
          Noske trust of which BBCA was a beneficiary, the taxpayers                  
          received cash back from BBCA on a regular basis).                           

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