Robert A. and Colleen L. Lund - Page 12




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          reported income.  Additionally, the ownership of International              
          Palm and Universal Sun was not disclosed.  Based on the evidence,           
          we are convinced that no economic interest in LPS or in Zero Gee            
          passed to any named beneficiary of Zero Gee.                                
          The evidence also establishes that petitioner, in his                       
          continued management of LPS, was not bound or restricted by the             
          terms of the Zero Gee trust.  Petitioner obtained bank loans and            
          credit for the business without approval of the trustees of Zero            
          Gee.  Petitioner appears to have had essentially unrestricted use           
          of the property purportedly transferred to Zero Gee.  The                   
          trustees were not meaningfully involved in the business of LPS or           
          of Zero Gee.  Petitioner was not restricted in any meaningful               
          manner in his use of the funds or in his management of LPS and              
          Zero Gee.                                                                   
               The only recognizable purpose for the formation of Zero Gee            
          was tax avoidance.  For $30,000, petitioner purchased a sham                
          trust package supported by no economic substance.  We conclude              
          that Zero Gee lacked economic substance and that the net income             
          of Zero Gee is taxable to petitioner.                                       
               Because we disregard Zero Gee for tax purposes and sustain             
          respondent’s deficiency determination against petitioners for the           
          years in issue, respondent’s protective deficiency determination            
          against Zero Gee is not sustained.                                          








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