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not all of petitioners’ personal assets to Re-Cap Trust. Neither
Hill nor his wife had beforehand consulted a competent
professional concerning the Federal income tax consequences of
Re-Cap Trust.
As to the subject year, Re-Cap Trust filed a 1999 Form 1041,
U.S. Income Tax Return for Estates and Trusts, that reported
total income of $332,520 and total deductions of $330,818. With
the exception of interest income of $435, the total income was
all attributable to commissions for realtor services performed by
Hill. The deductions claimed by Re-Cap Trust were in part for
petitioners’ personal expenses, including many of their personal
living expenses. Re-Cap Trust reported on this Form 1041 that
its 1999 total tax was $255.
Re-Cap Trust also claimed on that form a deduction for gifts
and donations totaling $21,439. The record does not identify the
individual amounts which go into the $21,439.1 Nor does the
record include a “written acknowledgment”, sec. 170(f)(8), from
any recipient who received a payment of $250 or more.
1 Although petitioners have referred to various purported
charities and note that the record contains checks drawn on the
checking account of Re-Cap Trust, we are unable to reconcile our
total of the checks payable to those referenced “charities” to
the $21,439 claimed by petitioners.
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