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decided on the totality of the facts. See United States v.
Cumberland Pub. Serv. Co., 338 U.S. 451, 454 (1950).
The following factors are generally considered in deciding
whether, for income tax purposes, a purported trust is to be
treated as lacking in economic substance: (1) Whether the
taxpayer’s relationship, as grantor, to the property differed
materially before and after the trust’s formation; (2) whether
the trust had an independent trustee; (3) whether an economic
interest passed to other beneficiaries of the trust; and
(4) whether the taxpayer honored restrictions imposed by the
trust or by the law of trusts. See Markosian v. Commissioner,
supra at 1243-1245.
Petitioner argues that his relationship to LPS materially
changed after the transfer of LPS to Zero Gee. We disagree.
After Zero Gee was established, petitioner essentially continued
to manage and operate LPS in the same manner as before the
purported transfer to Zero Gee. Petitioner’s relationship to LPS
did not materially change. The ordinary business affairs of Zero
Gee were conducted in the name of LPS. Daily business decisions
were made by petitioner. Compensation of employees was
determined by petitioner, and customers were invoiced by and paid
their bills to LPS. The record does not reflect that the named
trustees of Zero Gee limited petitioner’s control over any aspect
of the business of LPS.
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