Paul F. and Eleanore M. Nichols - Page 3




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          of JREP Trust.2  PERJ Trust was the sole beneficiary of CSM                 
          Trust.  During 1997 and 1998, PERJ Trust was the sole beneficiary           
          of JREP Trust.  The address of each of the trusts was the same as           
          the address of petitioners’ principal residence.                            
               On January 1, 1992, petitioners transferred a parking lot              
          sweeping business to CSM Trust.  Before this transfer, Mr.                  
          Nichols had operated the business as a sole proprietorship under            
          the name “Clean Sweep Maintenance”.  Petitioners then transferred           
          their principal residence to PERJ Trust.                                    
               Petitioners transferred the equipment of the sweeping                  
          business to JREP Trust.  JREP Trust leased the equipment of the             
          sweeping business to CSM Trust.                                             
               On October 13, 1995, petitioners signed and notarized a                
          “Certification of Revocable Living Trust and Loan Agreement”.  In           
          the certification, petitioners stated that they are the trustors            




               2 It is not clear from the record who were the trustees of             
          any of the trusts during the relevant years.  James A. Nichols,             
          petitioners’ son, filed 1997 and 1998 Federal income tax returns            
          for all three trusts in his capacity as trustee.  In the case at            
          hand, Robert Hogue (Mr. Hogue) cosigned with petitioners the                
          stipulation of facts as a trustee of JREP and PERJ Trusts.  In              
          addition, Mr. Hogue filed petitions with the Court on behalf of             
          these trusts.  See CSM Trust v. Commissioner, docket No. 9796-              
          01L; JREP Trust v. Commissioner, docket No. 9795-01L; PERJ Trust            
          v. Commissioner, docket No. 9794-01L; PERJ Trust v. Commissioner,           
          docket No. 6727-01; JREP Trust v. Commissioner, docket No. 6726-            
          01.  Because of Mr. Hogue’s failure to establish his capacity as            
          a trustee, the Court dismissed those cases on the ground that               
          they were not filed by a proper party.                                      





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