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d. Analysis
The Careys bear the burden of proof. They have failed to
prove that the trust interest and business gross receipts should
not be taxed to them under either the fundamental principles or
grantor trust rules described above.
The facts establish Michael’s occupation as an occupational
therapist and his proprietary ownership of two residential care
facilities. The facts also establish the existence of the trust,
that it reported in its Federal income tax return both gross
receipts from a business involving residential home care and
interest, and that Michael had various rights and
responsibilities with respect to the trust, including some
employment relationship and the authority to write checks on the
trust’s bank account. No facts establish that anyone other than
Michael exercised any control over the operations of the trust.
Indeed, Michael signed the trust 1995 return, and the trust’s
principal place of business was at the address we presume (from
the Carey 1995 return) to be Michael’s residence. The Careys
claim that, during 1995, Douglas J. Carpa, as trust officer of
American Common Trust Co., served as trustee of the trust. If
so, then, certainly, he is knowledgeable as to who controlled
trust operations during 1995. The Careys have failed to show
that Mr. Carpa was unavailable to testify at the trial of this
case. We think that a fair inference to be drawn from the
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