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Trust Under the Will of Bella Mabury, Deceased, Walter R. Hilker, Jr., Trustee, Petitioner v. Commissioner of Internal Revenue, RespondentTrust Under Will of Mabury v. CommissionerDocket Nos. 6119-80, 6120-80April 21, 1983, Filed
United States Tax Court *95
Decisions will be entered for the petitioner .The will of decedent, who died on Oct. 16, 1964, provided for the establishment of a "charitable trust" as defined by
sec. 4947(a)(1), I.R.C. 1954 . The terms of the trust provided for accumulation of all trust income during the existence of the trust.The trust is to terminate upon the earlier of (1) the publication of a designated book by a specified organization described in
sec. 509(a)(1) , or(2) the expiration of 21 years from the death of the survivor of three persons named in decedent's will. If the trust terminates as a result of the book's being published, the trust estate is to be distributed to the specified organization described insec. 509(a)(1) . If the trust terminates upon the passage of the 21-year period, then the trust estate is to be equally distributed to two other organizations designated in decedent's will.Held , since the trust's articles of organization expressly empower it to benefit organizations other than specified organizations described insec. 509(a)(1) or(2) , the trust is not a supporting organization within the meaning ofsec. 509(a)(3) .Sec. 1.509(a)-4(c), Income Tax Regs. Since the trust's*96 creation, its trustee has accumulated all its income and made no distributions of income or principal to any of the charitable beneficiaries. For the fiscal years ended Sept. 30, 1974, and Sept. 30, 1975, the trust's "adjusted net income" as defined by
sec. 4942(f) exceeded its "minimum investment return" as defined bysec. 4942(e) . Respondent determined excise taxes undersecs. 4942(a) and4942(b) for failure to distribute income earned in the fiscal years ended Sept. 30, 1974, and Sept. 30, 1975.Held :Cal. Civ. Code sec. 2271 et seq. did not automatically reform the trust's governing instrument to require the trust to "distribute its income for each taxable year (and principal if necessary) at such time and in such manner as not to subject the assets of the trust to tax underSection 4942 ." Consequently, resort to a judicial proceeding was necessary to reform, or to excuse the trust from compliance with, its governing instrument to comply withsec. 4942 .Held, further : The only judicial proceeding instituted by the Mabury Trust to reform, or to excuse it from complying with, the provisions of its governing instrument requiring accumulation of income failed before the *97 years in issue. Accordingly, pursuant to sec. 101(l)(3)(B) of the Tax Reform Act of 1969, Pub. L. 91-172, 83 Stat. 487, during the years in issue, the trust was not required to comply with the requirements ofsec. 4942 (and is not subject to tax for failing to do so) to the extent its income is required to be accumulated. See sec. 53.4942(a)-2(e)(3), Foundation Excise Tax Regs.Mark Townsend , for the petitioner. , for the respondent.Dennis Brager Irwin,Judge .IRWIN*719 OPINION
By notices of deficiency, dated January 29, 1980, respondent determined the following excise tax deficiencies: *720
Year ending First-tier tax Second-tier tax Docket No. Sept. 30 -- sec. 4942(a) sec. 4942(b) 6119-80 1975 $ 55,280 $ 368,535 1976 55,280 1977 55,280 1978 55,280 1979 55,280 6120-80 1976 64,851 432,340 1977 64,851 1978 64,851 1979 64,851 The issues for decision are: (1) Whether the Mabury Trust had "undistributed income" for its taxable year ended September*104 30, 1974, and is liable for an initial excise tax imposed in the amount of 15 percent of such "undistributed income," for each of its taxable years ended September 30, 1975, through September 30, 1979, under
section 4942(a) ; (2) whether the Mabury Trust had "undistributed income" for its taxable year ended September 30, 1975, and is liable for an initial excise tax imposed in the amount of 15 percent of such "undistributed income," for each of its taxable years ended September 30, 1976, through September 30, 1979, undersection 4942(a) ; and (3) whether the Mabury Trust is liable for the 100-percent additional excise tax imposed bysection 4942(b) on "undistributed income" of a private foundation for its taxable years ended September 30, 1974, and September 30, 1975.These cases were fully stipulated pursuant to
Rule 122, Tax Court Rules of Practice and Procedure. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference.The petitioner herein, Walter R. Hilker, Jr., is the trustee of the Mabury Trust created pursuant to the last will of Bella Mabury.
Decedent Bella Mabury (hereinafter decedent) died testate on October 16, 1964. Decedent's*105 will provided for the establishment of a trust, the Mabury Trust. The pertinent terms of such trust provide that, during the existence of the trust, all trust income is to be accumulated and to become principal of the *721 trust estate. After the death of decedent's sister, Eloise Mabury Knapp, the trust is to terminate whenever the first of the following two events occurs: (1) When the Mother Church, the First Church of Christ, Scientist, in Boston, Mass. (hereinafter the church), and the trustees of the Christian Science Publishing Co. cause to be published a book, written by Bliss Knapp, entitled "The Destiny of the Mother Church" (hereinafter the book) or (2) upon the expiration of 21 years after the death of the survivor of three persons named in decedent's will.
The terms of the trust further provide that, if the trust terminates by reason of the publication of the book, then the assets of the trust estate are to be distributed exclusively to the church. If the trust terminates by reason of the passage of the 21-year period, then the assets of the trust estate are to be distributed in equal shares to Museum Associates (hereinafter the museum) and Leland Stanford, Jr. *106 University (hereinafter the university).
The church, the museum, and the university are included in the Cumulative List of Organizations described in section 170(c) as published by the Internal Revenue Service. The church also is an organization described in
section 509(a)(1) .Wherefore, Petitioner prays as follows:
2. That the Court make such further Order as is deemed proper.
On January 28, 1976, the California Court of Appeal reversed the trial court's order and ordered the trustee "to *724 take such steps as [the trustee], in his discretion, deems necessary (including a payment of all or a portion of the tax), to obtain a definitive ruling from an appropriate federal court with respect to whether the Mabury Trust is subject to the tax imposed by
Internal Revenue Code section 4942 for the fiscal year ending September 30, 1973." , 987, 127 Cal. Rptr. 233">127 Cal. Rptr. 233 (Cal. Ct. App. 1976). Petitions for hearing by the California Supreme Court were denied on March 31, 1976.Matter of Estate of Mabury , 54 Cal. App. 3d 969">54 Cal. App. 3d 969Pursuant to the instructions of the Court of Appeal set forth above, the Superior Court ordered petitioner, as successor*113 trustee of the Mabury Trust, to do the following:
file an amended Schedule PF to Form 1041, Determination of Liability for Chapter 42 Tax, and * * * file a Form 2720, Return of Initial Taxes on Private Foundations, for the Trust's fiscal year ending September 30, 1975 for the purpose of reflecting the full amount of tax due by reason of the failure of the Trust to make any qualifying distributions during its fiscal year ending September 30, 1975 for undistributed income determined for the year ending September 30, 1973, and * * * pay the full amount of tax shown due thereon.
The Superior Court further ordered petitioner to immediately thereafter "file a Claim for Refund, Form 843, on the basis that the tax paid with the amended Schedule PF and Form 4720 for the year ending September 30, 1975 was not due and request the prompt denial of such Claim for Refund."
On or about January 13, 1976, Ralph Kohlmeier, as the then trustee of the Mabury Trust, filed with respondent a Form 1041 for the Mabury Trust's fiscal year ended September 30, 1975, and Schedule PF to such Form 1041, reflecting that
section 4942 was inapplicable to the Mabury Trust for its fiscal years ended September 30, *114 1973, September 30, 1974, and September 30, 1975. Petitioner, on or about February 16, 1978, filed with respondent (1) an amended Schedule PF to Form 1041 for the Mabury Trust's fiscal year ended September 30, 1975, indicating that as of September 30, 1975, there was undistributed income undersection 4942 for the Mabury Trust's fiscal year ended September 30, 1973, in the amount of $ 159,537, and (2) a Form 4720 reflecting tax in the amount of $ 23,931 on such undistributed income for the trust's fiscal year ended September 30, 1973. On or about February 16, 1978, petitioner paid respondent $ 23,931, plus $ 3,508 representing *725 interest on the $ 23,931 from January 15, 1974, through February 16, 1978. On or about February 16, 1978, petitioner submitted to respondent a claim for refund in the amount of $ 27,439, representing the above-described tax plus interest.On October 2, 1978, when more than 6 months had elapsed from the date of filing the claim for refund with no action thereon by respondent, petitioner instituted a suit for refund of taxes in U.S. District Court for the Central District of California. The complaint filed in such suit contained substantially the*115 same statement of facts as set forth above respecting the trust's fiscal year ended September 30, 1973. Respondent determined that the statute of limitations for assessment of taxes under section 6501 had expired prior to assessment of the taxes involved in the District Court suit and refunded the $ 23,931 plus interest. Petitioner and respondent thereafter filed a Stipulation for Dismissal with Prejudice and Order Thereon of the District Court suit and the court entered its order in accordance therewith on April 9, 1980.
The trustee of the Mabury Trust has accumulated all income of the trust and has made no distributions of income or principal to any of the charitable beneficiaries since the date of the trust's creation. The book has neither been published nor caused to be published by the church.
The Mabury Trust is a "charitable trust" as defined by
section 4947(a)(1) . Its "adjusted net income" as defined bysection 4942(f) and its "minimum investment return" as defined bysection 4942(e) for its taxable years ended September 30, 1974, and September 30, 1975, are as follows:Year ended Adjusted net income Minimum investment return Sept. 30 sec. 4942(f) sec. 4942(e) 1974 $ 413,057 $ 317,129 1975 457,476 353,907 *116 The first issue for decision is whether petitioner is liable for the initial 15-percent excise taxes imposed by
section 4942(a) . *726 The parties primarily dispute whetherCalifornia Civil Code section 2271 (West Supp. 1981) automatically reformed the governing instrument of the Mabury Trust so as to require the trust to distribute its income (and, if necessary, its principal) in order to avoid imposition of the excise taxes provided bysection 4942 .Section 4942 requires, in general, that certain private foundations make a minimum level ("distributable amount") of charitable contributions ("qualifying distributions"). The distributable amount equals the greater of the foundation's "minimum investment return" (as defined bysection 4942(e) ) or "adjusted net income" (as defined bysection 4942(f) ), reduced by specified adjustments. If a private foundation fails to currently distribute its distributable amount in the form of qualifying distributions, an initial tax and an additional tax are imposed. The initial tax is imposed in the amount of 15 percent of any part of the distributable amount remaining undistributed at the beginning of the second taxable year (and each succeeding taxable year) following the year for which the distributable amount was calculated. If any portion of the distributable amount*118 remains undistributed at the close of the taxable period,section 4942(b) Sec. 4942(j)(1) . *119 *727 Section 101(l)(3) of the Tax Reform Act provides transitional rules for the application ofsection 4942 .With respect to organizations organized before May 27, 1969, section 101(l)(3)(B) of the Tax Reform Act provides, in part, that
section 4942 shall not apply to an organization to the extent that it is required to accumulate its income "pursuant to the mandatory terms (as in effect on May 26, 1969, and at all times thereafter) of an instrument executed before May 27, 1969."section 4942 provided by section 101(l)(3)(B) is applicable, however, for taxable years beginning after December 31, 1971, only during the pendency of any judicial proceeding by a private foundation which is necessary to reform, or to excuse the foundation from compliance with, its governing or other instrument and for all periods following the termination of any such judicial proceeding to the extent that the governing instrument requires that the foundation's income be accumulated. Sec. 101(l)(3) of the Tax Reform Act.Nearly every State recognized that the institution of judicial proceedings by all private foundations organized before January 1, 1970, to reform their governing instruments would overburden its State courts. As a result, most States enacted *729 statutes to comply with
section 13.8, Temporary Income Tax Regs. (1970).California Civil Code section 2271 (West Supp. 1981), which became effective on August 24, 1971, provides:(4) The exemption from
section 4942 provided for organizations organized prior to May 27, 1969, in post-judicial proceeding years includes exemption for nondistribution of corpus provisions contained in the trust's instrument contrary to a portion of section 53.4942(a)-2(e), Foundation Excise Tax Regs. *126 Respondent answers these arguments as follows:*731 (3) The Mabury Trust is not an organization described in
section 509(a)(3) ;At the outset, we determine whether the Mabury Trust must be considered a private foundation.
Section 509(a) provides in pertinent part:SEC. 509 . PRIVATE FOUNDATION DEFINED.Respondent insists that the Mabury Trust is not a supporting *732 organization because it has not met the conditions of
section 509(a)(3)(A) and(B) . We agree with respondent that the Mabury Trust was not a supporting organization since it was not "organized * * * exclusively for the benefit of, to perform the functions of, or to carry out the purposes of" the church within the meaning ofsection 509(a)(3)(A) . *129Section 1.509(a)-4(c) and(d), Income Tax Regs. , sets forth the requirements that the articles of an organization must satisfy to meet the organizational test ofsection 509(a)(3)(A) . Undersection 1.509(a)-4(c)(1), Income Tax Regs. , an organization is organized exclusively for one or more of the purposes specified insection 509(a)(3)(A) only if its articles of organization (1) limit the purposes of such organization to the purposes set forth insection 509(a)(3)(A) ; (2) specify the organizations described insection 509(a)(1) or(2) (hereinafter publicly supported organizations) on whose behalf the organization is to be operated; and (3) do not expressly empower the organization to operate to support or benefit any organization other than the specified publicly supported organizations. See , 471-472 (1982). Furthermore,Change-All Souls Housing Corp. v. United States , 229 Ct. Cl. , 671 F.2d 463">671 F.2d 463section 1.509(a)-4(c)(3), Income Tax Regs. , provides:The regulations are presumptively valid and must be upheld unless they are determined to be unreasonable and plainly inconsistent with the statute.
333 U.S. 496">333 U.S. 496, 501 (1948). Petitioner does not contest the validity of the regulations. Instead, petitioner *733 contends that the terms of the Mabury Trust satisfy the conditions set forth in the regulations.Commissioner v. South Texas Lumber Co .,Specifically, petitioner contends that the organizational*131 test described in the regulations is satisfied because the terms of the Mabury Trust designate the church by name, the sole purpose of the Mabury Trust is to accumulate income and retain corpus for the church, and the Mabury Trust has no authority to engage in any activities other than those enumerated for the benefit of the church. In our view, the fully stipulated facts do not support petitioner's argument.
Under the terms of the Mabury Trust, if the church causes the book to be published before the expiration of 21 years after the death of the survivor of three persons named in decedent's will, then the entire trust estate is to be distributed to the church, which is an organization described in
section 509(a)(1) (i.e., a publicly supported organization). However, the terms of the trust also provide that if the church fails to cause the book to be published before the expiration of the specified time period, then the assets of the trust estate shall be distributed in equal shares to the museum and the university. No indication that the museum and the university are publicly supported organizations exists in the stipulation of facts on which this case was submitted. Indeed, *132 petitioner makes no assertion that the museum and the university are publicly supported organizations. We, accordingly, must conclude that they are not such organizations. SeeRules 142 and122(b), Tax Court Rules of Practice and Procedure. The fact that the terms of the Mabury Trustexpressly empower it to benefit organizations other than "specified" publicly supported organizations compels us to conclude that the organizational test was not met. Furthermore, it is immaterial that the Mabury Trust may never actually operate so as to benefit any organization other than the Church. Seesec. 1.509(a)-4(c)(3), Income Tax Regs. *133 Since the trust is not a supporting organization, we must *734 decide whether, as a private foundation, its governing instrument is automatically deemed, by virtue ofCalifornia Civil Code section 2271 , to contain a provision requiring its trustee to "distribute its income for each taxable year (and principal if necessary) at such time and in such manner as not to subject the assets of the trust to tax underSection 4942 ." If the trust's governing instrument is automatically deemed to contain such a provision, then neither section 101(l)(3)(B) nor section 101(l)(3)(E) of the Tax Reform Act relieved the trust from making the qualifying distributions necessary to avoid the excise taxes imposed bysection 4942 . If, however, the trust's governing instrument was not automatically reformed byCalifornia Civil Code section 2271 , then section 101(l)(3) of the Tax Reform Act exempted the trust from (1) distributing both income and corpus to comply withsection 4942 during years when any judicial proceeding by the trust was pending to reform, or excuse it from compliance with, its governing instrument in order to comply with the requirements ofsection 4942 , and(2) distributing income*134 for all periods after any such proceeding had terminated to the extent that the trust's governing instrument still failed to permit compliance with the income distribution requirements ofsection 4942 .Unfortunately, from our point of view, there is no legislative history or decision of the highest court of the State of California dealing with the question before us. In fact, not even a lower State court has explicitly considered the question. We, accordingly, must determine how we think the highest State court would interpret
California Civil Code section 2271 if presented with the question. 312 F.2d 323">312 F.2d 323, 327-328 (7th Cir. 1963);Doetsch v. Doetsch , , 995 (1980), remandedBoyter v. Commissioner , 74 T.C. 989">74 T.C. 989668 F.2d 1382">668 F.2d 1382 (4th Cir. 1981). See , 531 (1978).Gordon v. Commissioner , 70 T.C. 525">70 T.C. 525The Supreme Court of California has often applied the elementary canon of statutory construction that significance, if possible, should be given to every word, phrase, sentence, or part of an act and that no part should be treated as meaningless or superfluous, unless there *135 is obvious contradiction or error. See, e.g.,
, 548 P.2d 1115">548 P.2d 1115 (1976);Turner v. Board of Trustees, Calexico Unified Sch. D ., 16 Cal. 3d 818">16 Cal. 3d 818 , 335 P.2d 672">335 P.2d 672 (1959). See also 2A J. Sutherland, Statutory *735 Construction, sec. 46.06 (4th ed. 1973). We agree with petitioner's argument that application of that rule of construction toSelect Base Materials, Inc. v. Board of Equalization , 51 Cal. 2d 640">51 Cal. 2d 640California Civil Code section 2271 et seq. leads to the conclusion that the governing instrument of every California trust deemed to be a private foundation is not automatically considered to contain language requiring it to distribute income (and principal if necessary) to comply withsection 4942 .To read
California Civil Code section 2271 as automatically reforming the governing instrument of every trust deemed to be a private foundation to conform with the requirements ofsection 4942 , is to render superfluousCalifornia Civil Code section 2271.2(a) which provides:The superior court shall have jurisdiction to hear and determine any proceedings contemplated by paragraph (3) of subsection (*136
1 ) of Section 101 of the Tax Reform Act of 1969. Such proceedings may be brought by the organization involved. All specifically named beneficiaries of such organization and the Attorney General shall be parties to such proceedings. This provision shall not be exclusive and is not intended to limit any jurisdiction which otherwise exists.The only proceedings contemplated by paragraph (3) of subsection (l) of section 101 of the Tax Reform Act are proceedings that are necessary to reform, or to excuse a private foundation from compliance with provisions of a governing instrument executed before May 27, 1969, that require accumulation of income and/or prohibit invasion of corpus in order to comply with the provisions of
section 4942 . Hence, if, as asserted by respondent, provisions requiring distribution of income (and principal if necessary) to avoid the excise taxes imposed bysection 4942 are deemed to be included in the governing instrument of each trust deemed to be a private foundation, by virtue ofCalifornia Civil Code section 2271 , any judicial proceedings contemplated by section 101(l)(3) of the Tax Reform Act would be unnecessary andCalifornia Civil Code section 2271.2(a) *137 would be superfluous.California Civil Code section 2271 requires, inter alia, that the trustee or trustees of a "charitable trust," as defined insection 4947(a)(1) , such as the Mabury Trust, "distribute its income for each taxable year (and principal if necessary) at such time and in such manner as not to subject the assets of such trust to tax underSection 4942 * * * (as modified by *736 paragraph (3) of subsection (1) of Section 101 of the Tax Reform Act of 1969 )." (Emphasis added.) As earlier noted, pursuant to the transitional rule of section 101(l)(3)(B) of the Tax Reform Act, if a judicial proceeding to reform, or to excuse a private foundation from compliance with, a governing instrument executed before May 27, 1969, fails to reform, or to result in permission to deviate from, provisions of the governing instrument requiring accumulation of income, then the private foundation's assets are not subject to tax undersection 4942 to the extent that income is accumulated in accordance with such provisions of the governing instrument.California Civil Code section 2271 , as automatically reforming the governing instrument of every trust to *138 which it applies to allow the qualifying distributions necessary to avoid imposition of tax undersection 4942 , would require distributions to literally comply withsection 4942 , which, if such a judicial proceeding was instituted, might not be required as a result of this transitional rule of the Tax Reform Act.We believe on the facts of this case that
section 4942 was inapplicable to the Mabury Trust to the extent that it continued to accumulate income in accordance with its governing instrument following the termination of the judicial proceeding instituted on November 1, 1971. *145 The stipulated exhibits plainly show that the only judicial proceeding initiated by the Mabury Trust to reform, or to excuse it from compliance with, the provisions of its governing instrument requiring accumulation of income was the proceeding commenced on or about November 1, 1971. The Petition to Change Terms of Trust and for Instructions filed with the Los Angeles Superior Court on or about November 1, 1971, expressly asked the court to reform the Mabury Trust's governing instrument to require that income and additional amounts, if necessary, be distributed at such time and in such manner as not to subject the trust to tax undersection 4942 . After that request was denied, no notice of appeal was filed and no further proceedings seeking reformation of, or excuse from compliance with, the provisions of the Mabury Trust's governing instrument requiring accumulation of income was commenced.Footnotes
2. Pars. 5 and 9 of the stipulation of facts submitted by the parties, as well as exhibits attached to the stipulation, indicate that the former trustee's last name is spelled "Kohlmeier." Accordingly, we will hereinafter use that spelling, as opposed to the spelling "Kohlemier" appearing in par. 11 of the stipulation of facts, apparently as the result of a typographical error.↩
3. In relevant part,
sec. 4942(a) provides:SEC. 4942 . TAXES ON FAILURE TO DISTRIBUTE INCOME.(a) Initial Tax. -- There is hereby imposed on the undistributed income of a private foundation for any taxable year, which has not been distributed before the first day of the second (or any succeeding) taxable year following such taxable year (if such first day falls within the taxable period), a tax equal to 15 percent of the amount of such income remaining undistributed at the beginning of such second (or succeeding) taxable year. * * *↩
4.
Sec. 4942(b) provides:(b) Additional Tax. -- In any case in which an initial tax is imposed under subsection (a) on the undistributed income of a private foundation for any taxable year, if any portion of such income remains undistributed at the close of the taxable period, there is hereby imposed a tax equal to 100 percent of the amount remaining undistributed at such time.↩
5.
Sec. 4942(j)(1) provides:(j) Other Definitions. -- For purposes of this section --
(1) Taxable period. -- The term "taxable period" means, with respect to the undistributed income for any taxable year, the period beginning with the first day of the taxable year and ending on the earlier of --
(A) the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a) under section 6212, or
(B) the date on which the tax imposed by subsection (a) is assessed.↩
6. Sec. 101(l)(3)(B) of the Tax Reform Act further provides, however, that
sec. 4942↩ shall apply to such an organization if the organization would have been denied exemption if former sec. 504(a) had not been repealed by the Tax Reform Act, or the organization would have had its deductions under sec. 642(c) limited if former sec. 681(c) had not been repealed by the Tax Reform Act. Respondent has conceded that the Mabury Trust would neither have been denied exemption under sec. 501(c)(3) if sec. 504(a) had not been repealed nor have had its deductions limited under sec. 642(c) if sec. 681(c) had not been repealed.7.
Rev. Rul. 75-38, 1 C.B. 161">1975-1 C.B. 161 ; Fremont-Smith, "Impact of the Tax Reform Act of 1969 on State Supervision of Charities,"8 Harv. J. Legis. 537, 540-550↩ (1971) .8. Petitioner also asserted, in his petition, that the Mabury Trust is an organization described in
sec. 4942(j)(3) and, as such, not subject to the tax imposed bysec. 4942 . Petitioner appears, however, to have abandoned that assertion as he makes no argument in his brief to support it. In any event, we note that the Mabury Trust is not an organization described insec. 4942(j)(3) , inasmuch as it did not make qualifying distributions "equal to substantially all of its adjusted net income," as defined insec. 4942(f) . Seesec. 4942(j)(3)(A)↩ .9. For this reason, we do not address respondent's other arguments.↩
10. See
, andSanta Cruz Building Association v. United States , 411 F.Supp 871, 882-883 (E.D. Mo. 1976) , applying analogous regulations (Interneighborhood Housing Corp. v. Commissioner , T.C. Memo. 1982-661sec. 1.501(c)(3)-1(b), Income Tax Regs. ) to conclude that organizations were not organized exclusively for one or more purposes set forth in sec. 501(c)(3), because the articles of the organizationsexpressly empowered↩ the organizations to engage in substantial nonexempt activities.11. See
(In re Estate of Finley , 60 Pa. D. & C.2d 38Allegheny County Orphans' Ct. 1972, 30 AFTR 2d 72↩-5539, 72-2 USTC par. 9727), in which the court noted that its determination not to reform, or permit deviation from, provisions of a testamentary trust directing the trustee to accumulate one-fourth of the annual income until the trust principal amounts to $ 3 million would "not be detrimental taxwise to" the trust.12. As indicated above, petitioner assumes that the judicial proceeding which commenced on or about Nov. 1, 1971, terminated on Dec. 9, 1971. Respondent has not addressed the issue of when that judicial proceeding terminated. Although we disagree with petitioner's assumption, we believe that the proceeding initiated on or about Nov. 1, 1971, terminated during the Mabury Trust's fiscal year ended Sept. 30, 1972. See
Cal. Civ. Proc. Code sec. 1049↩ (West 1980) (providing that an action is deemed to be pending until the time for appeal has passed), and Cal. R. Ct. 2 (prescribing time for filing a notice of appeal from a judgment of a California Superior Court).
Document Info
Docket Number: Docket Nos. 6119-80, 6120-80
Citation Numbers: 80 T.C. 718, 1983 U.S. Tax Ct. LEXIS 95, 80 T.C. No. 34
Judges: Irwin
Filed Date: 4/21/1983
Precedential Status: Precedential
Modified Date: 11/14/2024