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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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