Gary D. Myers - Page 4

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               At a time not disclosed in the record, and perhaps because             
          of the death of her husband, Mrs. Myers became the sole trustee             
          of the trust.                                                               
               By March 2001, the health of Mrs. Myers had seriously                  
          deteriorated.  Accordingly, at that time, Mrs. Myers named                  
          Community First National Bank (currently, Bank of the West) as              
          successor trustee.  The institutional trustee continued to                  
          administer the trust for the principal benefit of Mrs. Myers.               
               On July 16, 2001, petitioner’s mother died.  At that time,             
          what had been a revocable trust became an irrevocable trust                 
          pursuant to the trust indenture.  Thereupon, petitioner was the             
          sole beneficiary, and the institutional trustee was required to             
          distribute all income to him currently.                                     
               During the last 5-1/2 months of 2001, the institutional                
          trustee made distributions directly to petitioner and, at                   
          petitioner’s direction, to petitioner’s creditors.  However, not            
          all of the income required to be distributed to petitioner in               
          2001 was actually distributed to him in that year.2                         
               As the institutional trustee of the Ruth Irene Myers                   
          Irrevocable Trust, Community First National Bank prepared a                 
          Schedule K-1, Beneficiary’s Share of Income, Deductions, Credits,           

               2  Pursuant to the trust indenture, the Ruth Irene Myers               
          Irrevocable Trust terminated in 2002.  The institutional trustee,           
          although required to distribute all income currently to                     
          petitioner, deferred complete distribution during the winding up            
          process for the trust.                                                      

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