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To further achieve his financial goals, petitioner formed
Anthony Sadberry Family Trust No. 1 (the Trust) in 1999 to
finance Andrea’s education and provide for her in the event of
his death or incapacity. The Trust was assigned its own tax
identification number in March 1999 and was funded in part by the
net proceeds of the SFB distributions.9 In June 1999, petitioner
withdrew $28,988 from the Trust. He deposited that amount into
his personal checking account and then issued a check for that
amount to Eastman for Andrea’s tuition for the 1999-2000 academic
year. Petitioner also paid for Andrea’s travel to Hawaii in July
1999 to attend a flute class not associated with Eastman but
recommended by her upcoming professor at Eastman. After Andrea
enrolled at Eastman, petitioner withdrew additional funds from
the Trust to pay for her living expenses, clothing, a computer,
rent, and flights to and from school. As trustee of the Trust,
he filed Form 1041, U.S. Income Tax Return for Estates and
Trusts, timely for 1999.10
During 1999, petitioner was approached by officials at
Georgetown University Law Center (Georgetown) to contribute to
the school’s African-American Scholarship Endowment. Since he
9 Petitioner assigned CD No. 17140, which he had
purchased after receiving the SFB distribution, to the Trust on
Apr. 6, 1999.
10 The Trust return reported $6,909.05 in income, all of
which was interest, and a tax of $1,704.05.
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