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Prior to February 1985, petitioner was title owner of the
5501 and 5955 properties. On February 28, 1985, petitioner
granted his interest in the 5501 and 5955 properties to Black
Creek Management Co. with Nassau Life Insurance Co.,20 Ltd., as
trustee21 by warranty deeds.
Oil and gas drilling sites were located on both the 5501 and
5955 properties. On February 1, 1985, petitioner executed an
Exchange of Royalty Interest with Old Labrador Investment Co.
with Nassau Life Insurance Co., Ltd., as trustee. The Exchange
of Royalty Interest indicates that petitioner granted Old
Labrador Investment Co. with Nassau Life Insurance Co., Ltd., as
trustee his interest in the oil and gas leases for both
properties for a stated consideration of $10. The Exchange of
Royalty Interest was recorded in the Trumbull County Recorder’s
Office on February 28, 1985.
20Nassau Life Insurance Co. was an entity which assisted
taxpayers to avoid the payment and collection of their Federal
income taxes. See Boyce v. Commissioner, T.C. Memo. 1990-658,
affd. without published opinion 955 F.2d 47 (9th Cir. 1992); see
also Para Techs. Trust v. Commissioner, T.C. Memo. 1992-575; and
Johnson v. Commissioner, T.C. Memo. 1989-591. Due to illegal
activities and a “tax situation”, Nassau Life Insurance Co.
ceased operations. See Bodor v. Commissioner, T.C. Memo. 1993-
456.
21The tax mailing address used by Nassau Life Insurance Co.
on the warranty deeds was P.M.B. 11 Grand Turk, Turks & Caicos
Islands, British West Indies.
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