- 18 -
each other in the course of signing the documents to establish
the McKenzie Trust.
On May 14, 1993, Mr. Hartmann and Mr. Boatright executed a
contract entitled “McKenzie Trust, A Contractual Fiduciary
Trust”. The contract contained a declaration of trust and trust
indenture, the terms of which were identical to the Pago Trust’s
formation documents. Although Mr. Boatright never issued
certificates representing the 100 units of beneficial interest in
the McKenzie Trust, the parties stipulated that Glenmere
Investments was the 100-percent beneficiary of the trust during
the taxable years 1995 through 1998.20 Glenmere Investments and
its fiduciary are located in Nevis, British West Indies.
B. Operation of the McKenzie Trust
On May 14, 1993, the McKenzie Trust and petitioner executed
a General Agreement in which petitioner agreed to manage the
McKenzie Trust. The terms of the agreement were vague, requiring
only that petitioner perform “duties as the manager of the
McKenzie Trust and make sound business decisions which affect the
function and operation of the said trust as a whole.” The trust
paid petitioner management fees for his services.
20The McKenzie Trust’s tax returns for 1995 and 1997 have
Schedules K-1 that list Glenmere Investments as a beneficiary,
but there are no Schedules K-1 attached to the 1996 and 1998
returns.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011