-58-
contributed almost exclusively by one person. See Estate of
Strangi v. Commissioner, T.C. Memo. 2003-145; Estate of Harper v.
Commissioner, T.C. Memo. 2002-121. In the unique circumstances
of this case, however, a key difference exists in that decedent’s
primary concern was in perpetuating his philosophy vis-a-vis the
stock of the WTC trusts in the event of a termination of one of
those trusts. Here, by contributing stock in the Revocable
Trust, decedent was able to achieve that aim with respect to
securities of the WTC trusts even exceeding the value of his own
contributions. In this unusual scenario, we cannot blindly apply
the same analysis appropriate in cases implicating nothing more
than traditional investment management considerations.
To summarize, the record reflects that decedent’s desire to
prevent sale of core holdings in the WTC trusts in the event of a
distribution to beneficiaries was real, was a significant factor
in motivating the creation of Schutt I and II, was appreciably
advanced by formation of the business trusts, and was unrelated
to tax ramifications. The Court is thus able to conclude in this
case that Schutt I and II were formed for a legitimate and
significant nontax purpose without further probing the parties’
disagreement as to whether, in theory, an investment strategy
premised on buy and hold should offer just as much justification
for an entity premised thereon as a philosophy that focuses on
active trading.
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