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2. McKenzie Trust
Under the broad authority granted to petitioner in the
General Agreement, petitioner dealt freely with the trust’s funds
to purchase automotive parts and the Model T Ford chassis he
restored. The record does not indicate that petitioner ever
consulted with Mr. Boatright before purchasing supplies for the
business or selling the restored automobiles, even though the
terms of the trust granted dominion and control over its
administration to Mr. Boatright. Further, while the terms of the
trust mandated that the trust distribute 100 percent of its
profits to Glenmere Investments, petitioner withdrew trust income
in the form of management fees, without restriction, which left
little, if anything, to be distributed to the nominal beneficiary
of the trust. Accordingly, we find that petitioners were not
bound by any restrictions imposed by the trusts or the law of
trusts. Markosian v. Commissioner, supra at 1244; Norton v.
Commissioner, supra. This factor weighs against petitioners.
E. Conclusion
After reviewing the record, we cannot conceive of any
reason, other than tax avoidance, for the Gouveias to have
transferred a substantial portion of their personal income and
property and to have provided their full-time labor to the Pago
and McKenzie Trusts. Our conclusion is supported by the inherent
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