Orneal and Martha Kooyers, et al. - Page 23

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          found income from property held in trusts similar to the OMK                
          trusts taxable to the grantors of those trusts under the “grantor           
          trust” provisions set out in sections 671 through 677.  See,                
          e.g., Zmuda v. Commissioner, supra at 1421; Holman v. United                
          States, supra at 464-65; Hanson v. Commissioner, supra at 1234;             
          Vnuk v. Commissioner, supra at 1321.  Under specified                       
          circumstances, the grantor trust provisions treat the grantor of            
          the trust as the substantial owner of all or part of the trust,             
          and all of the income and deductions pertaining to that part of             
          the trust must be taken into account by the grantor.  Sec. 671.             
          The grantor trust is not taxed on the income that is taxable to             
          the grantor.  Id.                                                           
               For purposes of the grantor trust provisions, a grantor                
          includes any person to the extent that person either creates a              
          trust or gratuitously transfers property, directly or indirectly,           
          to a trust.  Sec. 1.671-2(e)(1), Income Tax Regs.  If one person            
          creates or funds a trust on behalf of another person, both                  
          persons are treated as grantors of the trust.  Id.  Courts have             
          examined trust arrangements, similar to those at issue here,                
          where the wife generally conveys all her property to the husband            
          who then conveys to the trust all his property, including the               
          property transferred from his wife.  Although the wife was not a            









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