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ascertaining the ‘realities and substance’ of the transaction.”
Cf. Jones v. United States, 531 F.2d 1343, 1346 (6th Cir. 1976).
In a more recent opinion, we further extrapolated our position as
follows:
In determining the reality and substance of a transfer,
the ability, or the lack thereof, of the transferee to
alter a prearranged course of disposition with respect
to the transferred property provides cogent evidence of
whether there existed a fixed right to income at the
time of transfer. Although control over the
disposition of the transferred property is significant
to the assignment of income analysis, the ultimate
question is whether the transferor, considering the
reality and substance of all the circumstances, had a
fixed right to income in the property at the time of
transfer. [Ferguson v. Commissioner, 108 T.C. at 259;
citations omitted.]
This Court has not adopted the “bright-line” test stated in
Rev. Rul. 78-197, supra, as the test for resolving anticipatory
assignment of income issues, and instead we have considered the
donee’s control to be merely a factor, albeit an important
factor. For example, in Estate of Applestein v. Commissioner, 80
T.C. 331 (1983), the taxpayer transferred to custodial accounts
for his children stock in a corporation that had entered into a
merger agreement with another corporation. The merger agreement
was approved by the shareholders of both corporations before the
transfer. Although the transfer occurred before the effective
date of the merger, this Court held that the “right to the merger
proceeds had virtually ripened prior to the transfer and that the
transfer of the stock constituted a transfer of the merger
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