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On January 25, 1988, Black Creek Management Co. with Nassau
Life Insurance Co., Ltd., as trustee granted by warranty deed for
a stated consideration of $1 the 5501 and 5955 properties to
Trundle Management with Eton Trust Co., Ltd., as trustee22 by
warranty deed.23 On the same day, Old Labrador Investment Co.
with Nassau Life Insurance Co., Ltd., as trustee, granted for $1
in consideration its royalty interest in the oil and gas leases
in both properties to Trundle Management with Eton Trust Co.,
Ltd., as trustee.
Petitioner and his wife continued to reside at the 5955
property. Petitioner continued to use the 5501 and 5955
properties for livestock operations and to operate a veterinary
clinic. Petitioner continued to exercise dominion and control
over the 5501 and 5955 properties.
Pennzoil Oil and Scavenger Oil paid royalties for use of the
oil and gas wells located on both properties during the years in
22The tax mailing address used by Eton Trust Co., Ltd., on
the warranty deeds was Grant Petroleum Building, Providenciales,
British West Indies.
23The timing of the transfer is similar to the facts in
Bodor v. Commissioner, supra. The taxpayer in that case was
Frank R. Bodor. He is the attorney representing petitioner in
the present case. In Bodor, we found that the taxpayer
transferred his interest in eight properties by quitclaim to
various foreign entities for which Nassau Life Insurance Co.
served as trustee, that due to illegal activities in late 1986 or
early 1987, Nassau Life ceased operations, and that Mr. Bodor
knew that the problems stemmed from illegal activities and a “tax
situation”.
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