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(distributions to a trust holding taxpayer’s residence benefited
taxpayer, not economic interests of others).
On these facts, given the incidence of distributions that
bore no discernible relationship to the formal allocation of
beneficial interests, and the fact that these distributions all
tended to benefit Harlan, we conclude that no genuine economic
interest in Floors Trust passed to anyone other than Harlan. See
Markosian v. Commissioner, supra at 1244.
D. Trust Restrictions Binding Taxpayer
The final factor we consider is whether Harlan felt bound by
any restrictions imposed by Floors Trust or by the law of trusts.
See id.
In his testimony, Harlan conceded that his flooring business
was operated the same before and after its purported transfer to
Floors Trust. Indeed, notwithstanding the purported transfer of
the business, Harlan referred to Jody as “my” employee. Harlan
likewise testified that no trustee imposed any requirements or
made any demands with respect to the manner in which the business
was operated. Harlan had unrestricted access to the business
assets (as they were located at his residence) and to the
business checking account. Harlan’s unrestricted use of the
trust’s assets as well as his unrestricted management of the
installation business demonstrate that Harlan was not, in fact,
restricted in any meaningful manner. See id.; Gouveia v.
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