- 45 - 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.Page: Previous 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Next
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