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The Haneys’ Relationship to the Property of the Trust
Petitioners argue in their opening brief:
It is only the economic substance of AMC Trust, and
Oliver & Company Charitable Remainder Trust, that need
be evaluated.
* * * * * * *
Prior to the creation of AMC Trust, Mr. and
Mrs. Haney, as shareholders of the Subchapter S
corporation, J&J Commercial Services, Inc., enjoyed
full and unrestricted use of all the business assets
and income produced by the operation of Asphalt
Maintenance Company.
After the creation of AMC Trust, Mr. and
Mrs. Haney continued to have full and unrestricted use
only of the assets simultaneously placed in the grantor
trusts. Their personal residence was placed in one
grantor trust, and its upkeep was paid for by Mr. and
Mrs. Haney’s personal assets and income, not by
property of AMC Trust. Their personal vehicles were
placed in another grantor trust, and again, upkeep was
paid for from personal sources, not AMC Trust.
Business machinery and equipment was placed in a
grantor trust and was leased to AMC Trust for payment.
Maintenance of the equipment was, per the terms of the
lease, the responsibility of the lessee. Land acquired
by Mrs. Haney was placed in Jopah Trust and leased to
AMC Trust for payment. In both cases, these leases
were reasonable and rational uses for property
controlled by Mr. and Mrs. Haney, but beyond the right
to receive rent, their ownership interest in the
subject property through the grantor trusts does not
imply or convey any greater control over other revenues
of Asphalt Maintenance Company or AMC Trust. [Exhibit
refs. omitted.]
On the other hand, respondent argues:
The Haneys simply operated AMC in the exact same manner
as they conducted operations as J&J. They retained
substantial control of the business activity and the
bank accounts.
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