Perry Funeral Home, Inc. - Page 12

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          Cir. 1981); see also Commissioner v. Indianapolis Power & Light             
          Co., 493 U.S. 203, 207 & n.3 (1990).                                        
               In contrast, amounts properly characterized as loans,                  
          deposits, or trust funds are not includable upon receipt.                   
          Commissioner v. Indianapolis Power & Light Co., supra at 207-208;           
          Johnson v. Commissioner, supra at 467-475; Oak Indus., Inc. v.              
          Commissioner, 96 T.C. 559, 563-564 (1991); Angelus Funeral Home             
          v. Commissioner, 47 T.C. 391, 397 (1967), affd. 407 F.2d 210 (9th           
          Cir. 1969).  The rationale underlying this distinction is that              
          money received in the capacity solely of a borrower, depository,            
          agent, or fiduciary, because it is accompanied by an obligation             
          to repay or restriction as to disposition, is not income at all.            
          See Commissioner v. Indianapolis Power & Light Co., supra at 208            
          n.3; Johnson v. Commissioner, supra at 474-475.  Hence, no                  
          question of the timing of income accrual is presented.  See                 
          Commissioner v. Indianapolis Power & Light Co., supra at 208 n.3;           
          Johnson v. Commissioner, supra at 474-475.                                  
               B.  State Funeral Services Regulation                                  
               Preneed contracts and arrangements in the Commonwealth of              
          Massachusetts are governed by the regulations of the Board of               
          Registration in Embalming and Funeral Directing.  Mass. Regs.               
          Code tit. 239, secs. 4.01-4.10 (2003); see also Mass. Gen. Laws             
          Ann. ch. 112, sec. 85 (West 2003) (authorizing the board to                 
          adopt, promulgate, and enforce regulations).  For purposes of               






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