-347-
and his earlier renunciations were, for all practical purposes,
meaningless gestures.
In sum, we hold Kanter was the true settlor of the Bea Ritch
Trusts--he funded the trusts over a period of many years, and he
retained at all times a power to appoint the beneficiaries of the
Bea Ritch Trusts that was tantamount to a power of disposition
over the trusts’ assets. See secs. 671, 674(a); sec. 1.671-
2(e)(1), Income Tax Regs. (“[A] grantor includes any person to
the extent such person either creates a trust, or directly or
indirectly makes a gratuitous transfer * * * of property to a
trust. * * * If a person creates or funds a trust on behalf of
another person, both persons are treated as grantors of the
trust.”); sec. 1.674(a)-1, Income Tax Regs. Consequently, Kanter
is taxable on the income of the Bea Ritch Trusts for 1986 and
1987.137
The Cablevision transactions in 1986 and 1987 were
additional examples of Kanter’s preferred modus operandi. In
particular, Kanter allowed the Bea Ritch Trusts to subscribe to
the 18-percent partnership interest in OBA to which he was
otherwise entitled. Although the Bea Ritch Trusts invested
$18,000 in OBA, as discussed above, those funds in all likelihood
137 To the extent we have already determined certain
payments to Century Industries (for the year 1986) constituted
Kanter’s income, that income should not be attributed to Kanter a
second time when computing his income for 1986 as the grantor of
the Bea Ritch Trusts.
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