Kevin D. Castro and Margarita C. Castro, et al. - Page 22




                                       - 22 -                                         
               The absolute and unbridled discretion conferred on the                 
          Castros as trustees is confirmed by language in the CFT’s                   
          declaration of trust, which provided that “A Minute of                      
          Resolutions of THE BOARD of TRUSTEES authorizing what it is they            
          determine to do or have done shall be evidence that such an act             
          is within their power.”  We have held on numerous occasions that            
          such unbridled power gives taxpayer-trustees the same control               
          over the property as they enjoyed before the formation of the               
          trust.  See, e.g., id. at 1241, 1244; Cooper v. Commissioner,               
          T.C. Memo. 1981-369; Palmer v. Commissioner, T.C. Memo. 1981-354.           
               Our analysis is supported by the inherent implausibility of            
          petitioners’ position.  It defies common sense that petitioner              
          would grant the exclusive use of his lifetime services to the CFT           
          for no remuneration and make an anticipatory transfer of any and            
          all future earnings to the CFT.  It defies common sense that the            
          Castros would transfer practically all of their assets, including           
          their home, furnishings, and business, to the trusts for                    
          practically nothing in return while retaining no control over the           
          assets.  See Buckmaster v. Commissioner, T.C. Memo. 1997-236.               
               The Castros had the power to allocate all trust principal              
          and income to themselves in derogation of any other                         
          beneficiaries.  The record fails to show that anyone other than             
          petitioner held units of beneficial interest in the trusts during           
          the years at issue.  On these facts, we conclude that petitioners           
          have failed to prove that any economic interest passed to any               







Page:  Previous  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  Next

Last modified: May 25, 2011