Greg William Gouveia, a.k.a. Greg W. Gouveia, a.k.a. Greg Gouveia & Carol Ann Gorveia, a.k.a. Carol Gouveia, et al. - Page 15

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          estate rental business was profitable, and the trust declared               
          distributions each year.  From 1994 to 1998, the trust allegedly            
          distributed more than $294,000 to the Brookes Group with respect            
          to its purported ownership of 90 units of beneficial interest in            
          the Pago Trust.  Distributions to the Brookes Group were made via           
          wire transfer to the Century Trust Company’s overseas bank                  
          account.  Because the Pago Trust distributed all of its income              
          each year and claimed a corresponding income distribution                   
          deduction for those amounts, it never reported any taxable income           
          or paid any taxes.                                                          
               The Schedules K-1, Beneficiary’s Share of Income,                      
          Deductions, Credits, etc., attached to the Pago Trust’s Forms               
          1041, listed petitioner, Mrs. Gouveia, and the Brookes Group as             
          the beneficiaries of the Pago Trust.  According to the Schedules            
          K-1, the Gouveias received the remaining 10 percent of the Pago             
          Trust’s distributions.                                                      
               C.   Examination of the Pago Trust’s 1998 Tax Return                   
               On its Form 1041 for 1998, the Pago Trust reported income              
          and expenses allocable to the Prado Road property on Schedule E,            
          Supplemental Income and Loss.  The trust claimed deductions for             
          interest, taxes, fiduciary fees, trust manager fees, and income             
          distributions.                                                              
               On June 6, 2001, Mr. Norton executed a Form 56, Notice                 
          Concerning Fiduciary Relationship, and a Form 2848, Power of                






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