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purposes, bars alienation as a means for presently reaching
economic value. Transfers subject to the contingency of manager
approval cannot support a present interest characterization, and
the possibility of making sales in violation thereof, to a
transferee who would then have no right to become a member or to
participate in the business, can hardly be seen as a sufficient
source of substantial economic benefit. We therefore conclude
that receipt of the property itself, the Treeco units, did not
confer upon the donees use, possession, or enjoyment of property
within the meaning of section 2503(b).
C. Application to Income From the Gifted Property
Turning then to whether the gifts of Treeco units afforded
to the donees the right to use, possession, or enjoyment of
income therefrom, we again answer this question in the negative.
As before, broadly applicable standards and reasoning derived
from both the trust cases and the cases involving gifts to a
partnership or corporate entity call for this result.
In particular, this Court has distilled caselaw in these
areas into a three-part test for ascertaining whether rights to
income satisfy the criteria for a present interest under section
2503(b). Calder v. Commissioner, 85 T.C. at 727-728. The
taxpayer must prove, based on surrounding circumstances and the
trust agreement: “(1) That the trust will receive income, (2)
that some portion of that income will flow steadily to the
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