Thomas B. Goldsby, Jr. and Sandra C. Goldsby - Page 13

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          that the $5,640,000 conservation easements meet this standard.6             
          Absent proof that the trust donated the conservation easements              
          from its income (rather than from the corpus), we cannot allow              
          petitioners to deduct the trust’s charitable contribution.  The             
          failure of a party to introduce evidence which, if true, would be           
          favorable to that party gives rise to the presumption that the              
          evidence would be unfavorable if produced.  Wichita Terminal                
          Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162           
          F.2d 513 (10th Cir. 1947).                                                  
               Petitioners argue that the donation must have come from                
          income because the trust agreement obligates the trustee to hold            
          the corpus for the benefit of the remaindermen, his children.               
          While we agree that petitioner was obligated to hold the corpus             
          for the benefit of the remaindermen, this does not dictate that             
          the conservation easements are part of the income portion of the            
          trust.  We note that petitioner did not comply with other                   
          directives in the trust agreement, such as the requirement to               
          distribute net income at least annually.                                    


               6Charitable contributions deductible by a trust under sec.             
          642(c) would generally be used in computing distributable net               
          income and would therefore be included in income by a person                
          treated as the owner of the trust’s income.  See secs. 643,                 
          642(c); sec. 1.671-3(b)(1) and (c), Income Tax Regs.  The                   
          charitable contribution at issue, however, would not be                     
          deductible by the trust under sec. 642(c) because the trust                 
          agreement does not authorize charitable contributions.  The                 
          charitable contribution thus would not be used in computing the             
          trust’s distributable net income or taxable income.                         





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