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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.
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