-344-
share of fees paid to Century Industries during 1981 to 1984 and
1986 (discussed supra, Issue III), with regard to which the
trusts ostensibly held a 49-percent partnership interest, (3) the
fees Kanter earned during 1981 to 1983 from Hi-Chicago Trust
which Kanter attempted to assign to THC (discussed supra Issue
IV) in which the trusts held substantial stock interests, and (4)
the 18-percent partnership interest the trusts acquired in OBA.
Respondent also asserts that sections 674(a) and 675(3) apply
under the facts presented so as to attribute to Kanter all of the
trusts’ income for 1986 and 1987.
C. The STJ Report
The STJ report, at 119-121, recommended holding (1) Kanter
had not transferred to the Bea Ritch Trusts substantial amounts
of income he earned from providing services to others, and (2)
Kanter was not the “true settlor” of the Bea Ritch Trusts. The
STJ report recommended accepting Kanter’s testimony in which he
denied he was paid anything for his assistance in bringing in
unrelated investors to the Cablevision project.
As discussed below, the objective evidence of record
indicates Kanter transferred substantial sums of his own income
to the Bea Ritch Trusts (directly and through IRA and THC) and
Kanter (through the Bea Ritch Trusts) was compensated with
partnership interests in LICCDC/Cablevision in exchange for
recruiting investors for the Cablevision project. Viewed in the
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