- 18 - into trust. They did not rent or lease the home or furnishings from the CFT. Their relationship to these assets did not differ materially before and after the formation of the CFT. The jewelry business was operated in much the same manner both before and after the CCJT was created. The jewelry business and its attendant activities continued under the same name, in the same office space, and with the same equipment. Petitioner continued to make the daily operating decisions and to manage the jewelry business, including overseeing employees, jewelry repair and design, and sales.9 Petitioner argued that business changes–-more employee training with weekly meetings and feedback sessions--were implemented after the CCJT was created, thereby changing petitioners’ relationship to the property. We disagree. The identified changes may have had the effect of improving the effectiveness of employees, but they had no material impact on the nature and structure of the business. The Castros’ use of the trust property before and after the transfers was not materially different. This factor weighs against petitioners. See id. at 1243-1244; Muhich v. Commissioner, supra; Buckmaster v. Commissioner, T.C. Memo. 1997- 236; Hanson v. Commissioner, T.C. Memo. 1981-675, affd. 696 F.2d 1232 (9th Cir. 1983). B. Independent Trustee The second factor we consider in determining whether a trust 9Mrs. Castro also continued to provide bookkeeping services and customer service just as she had before the CCJT was created.Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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