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One or both of the J. Shirleys personally performed all or
substantially all of the consulting services generating the gross
receipts of $179,791 reported by Alexion trust.
Caralan Trust
Caralan Trust is a trust created by the J. Shirleys.
Caralan Trust was created on September 1, 1994. In 1995, the
J. Shirleys and C E Shirley Trust were the beneficiaries of
Caralan Trust.
In 1995, one or the other, or both, of the J. Shirleys had
signatory authority over Caralan Trust’s bank accounts. The
J. Shirleys used such bank accounts to pay certain of their
personal expenses in 1995.
For 1995, Joseph Shirley made a return of Federal income tax
for Caralan Trust on Form 1041, U.S. Income Tax Return for
Estates and Trusts (the Caralan Trust 1995 return). He signed
that return as a fiduciary. In that return, Caralan Trust
reported as items of gross income $4 of interest and the $101,437
of income claimed as a distribution by Alexion Trust to it. It
deducted $24,165 as a loss from a rental activity (the rental
activity), and reported total income of $77,276. It further
deducted $42 for a claimed charitable deduction, and it reported
“Adjusted total income” of $77,234. From such adjusted total
income, it deducted $77,234 on account of distributions of income
in the amounts of $13,753 and $63,481 to the J. Shirleys and
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