-348-
derived from earnings Kanter assigned to or for the benefit of
the trusts. Moreover, the record shows that OBA received its
interest in LICCDC/Cablevision and the additional related
partnership interests in HB, BW, and YP solely in exchange for
Kanter’s and other Levenfeld/Kanter partners’ efforts to raise
capital for LICCDC/Cablevision. Thus, the Bea Ritch Trusts’
partnership interests in HB, BW, and YP (acquired through OBA)
represented nothing more than Kanter’s compensation for
recruiting additional investors for the Cablevision project.138
Once again, Kanter improperly attempted to assign to the Bea
Ritch Trusts income he earned as payments for his personal
services. Accordingly, we hold Kanter, as grantor of the Bea
Ritch Trusts, is taxable on the trusts’ income for 1986 and 1987.
138 Petitioners rely on the holding in Statland v.
Levenfeld, Case No. 84 CH 6494, Circuit Court of Cook County,
Illinois, Decision entered Jan. 28, 1988 (Exh. 9195), as proof
that Kanter, his law firm partners, their family members, and
other family entities that invested in OBA did not obtain their
partnership interests in exchange for services the law firm
performed. Although this point may be true, there is no dispute
Kanter assisted Cablevision in finding additional investors. We
conclude he was compensated for these efforts (as opposed to his
legal services) with partnership interests in HB, BW, and YP.
Page: Previous 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 NextLast modified: May 25, 2011