- 10 - income beneficiary. He was able to, was required to, and did vest the income of the trust in himself. Petitioner as trustee was required to cause the trust periodically to pay him (as income beneficiary) the entire net income of the trust. Petitioner, as trustee, owed fiduciary duties with respect to the income only to himself, the sole income beneficiary. Accordingly, we conclude that petitioner has the sole power to vest the trust’s income in himself and is treated as the owner of the income portion of the trust.4 B. Petitioner Is Not the Owner of the Trust Corpus Despite the Undistributed Net Income Petitioners argue that they are also the owners of the trust corpus, or at least a portion of it, because petitioner left undistributed net income with the other trust assets and it became commingled with the trust corpus. Accordingly, they reason, they are entitled to the deduction for the charitable contribution no matter the source of the charitable contribution. We disagree. There are several fundamental problems with petitioners’ argument regarding ownership of the trust corpus. An examination of the trust agreement indicates that the settlor did not intend petitioner to have any rights with respect to the corpus, other 4The unique circumstances require a finding that petitioner should be treated as the owner of the trust’s income portion. We note, and petitioners acknowledge on brief, that this finding does not apply in every situation involving a simple trust.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011