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 45

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          Commissioner, 79 T.C. at 720; Markosian v. Commissioner, supra at           
          1243; Norton v. Commissioner, supra; Lund v. Commissioner, supra.           
          This factor favors respondent.                                              
               C.   Economic Interests                                                
               The third factor we consider is whether a genuine economic             
          interest in the trusts passed to anyone other than the Gouveias.            
          Markosian v. Commissioner, supra at 1243.                                   
                    1.   Pago Trust                                                   
               Petitioners have not offered any admissible evidence that              
          identifies the owners or beneficiaries of the Brookes Group or              
          the ultimate recipient of the funds distributed to its foreign              
          beneficiary.  At trial, counsel for respondent elicited testimony           
          that shows petitioner possessed the original copy of the Brookes            
          Group’s certificate for 90 units of beneficial interest in the              
          Pago Trust.  Further, the record is devoid of any credible                  
          evidence that the Brookes Group ever fulfilled its commitment to            
          advance funds to the Pago Trust to purchase real estate.                    
               It is inconceivable that petitioners would assign to the               
          trust the steady stream of income from the installment note and             
          receive only 10 percent of the trust’s distributions in return.27           
          It is also inconceivable that petitioners, in exchange for                  

               27We are also unpersuaded by petitioner’s testimony that he            
          transferred his property to the Pago Trust because he needed only           
          10 percent of the trust’s income to live on, and he thought that            
          operating the business in trust form would guarantee him a                  
          lifetime of income distributions.                                           





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