"The character of Trust for income tax purposes is dependent on phraseology of the

Trust
instrument whether it discloses a Pure Trust." Hill et al v. Reynolds, 75 F Supp,
408 (1948).

Q. WHAT CASE LAW DEFINES A PURE TRUST?

A. "If it is free of control by certificate holders, then it is a Pure Trust."
Schuman Heink v.
Folsom 159. N.E. 250 (1927).
BASIC DEFINITIONS
Q. WHAT IS THE DEFINITION OF THE WORD, "TRUST?"
A. "In its technical legal sense, a trust has been defined as "the right to the
beneficial enjoyment
of property, the legal title to which is vested in another." Bowes v. Cannon.
116P336.
Q. WHY ISN'T THE PURE TRUST A "TRUST?"
A. The PURE TRUST is not a "Trust" because it does not have a beneficiary with a
beneficial
interest in the assets of the trust like a regular trust

The fact that the Trustees hold title to the PURE TRUST, does not mean it is the
Trustees who
own the property. Trust property cannot be held under an attachment nor sold upon
the execution
of a Trustee's personal debts as held in Hussey v. Arnold, 70 NE 87; Mayo v. Moritz
24 NE
1083

13 Am Jur 2d says that one of the objects of business trusts is to obtain for the
associates most of the advantages of incorporation, without the authority of any
legislative act
and with freedom from the restrictions and regulations generally imposed by law
upon
corporations
.
D. TAX TREATY BENEFITS
Distribution of profits can be done with foreign PURE TRUSTS that have no U.S. tax
obligations due to tax treaties made with a number of foreign countries. Some of
these are
exempt from income taxes on certain amounts received from the U.S. (For guidelines
refer to
IRS Pub. 901 "Tax Treaties between the U.S. and Other Countries.")
E. NON-TAXABLE GIFTS
Profits earned by a foreign PURE TRUST (one not doing business in the US - see
definitions of
"United States" and "Non-Resident Alien" in the Internal Revenue Code) can be
gifted to any
American citizen TAX-FREE! PURE TRUSTS do not have to comply with the Gift Laws,
because the PURE TRUST is expressly non-taxable! This can really help you to build
your
estate! This information is fully explained in the instructions for the COMMON LAW
PURE
TRUST
Q. EXPLAIN THE PROCEDURE OF EXCHANGING ASSETS INTO THE PURE TRUST
ORGANIZATION.
A. Once the PURE TRUST has been created, the General Manager may transfer assets
(equipment, cash, property) into the PURE TRUST and receive in return a
"Certificate of Capital
Units." When those assets are placed into the PURE TRUST, it is not a sale, nor is
it a gift. It is
an "exchange" for valuable consideration, but with only indeterminable value. Thus,
there is no
taxable event.
The United States Supreme Court ruled that
"...if property received in exchange has no fair market
value, it does not represent taxable gain to the recipient."
Burnett v. Logan: 283 U.S. 404.

"In numerous cases where the IRS has sought enforcement of

its summons pursuant to statute (26 USC 7402), courts have
held that a taxpayer may refuse production of personal books,
and records by assertion of his privileges against
self incrimination." Hill v. Philpott. 445 F2d 144. 146
The court quoted Stuart v. U.S. 416F2d 459, and U.S. v. Kleckner. 273 F Supp 251

Q. WHAT IS THE TECHNICAL LEGAL REASON THAT THE PURE TRUST HAS NO
REPORTING REQUIREMENT TO THE STATE?
A. "The Pure Trust is an entity formed by contract, and thus
is not subject to the same types of state regulations as
a corporation." Elliot v. Freeman. 220 U.S. 128

Q. WHAT CASE LAW DEFINES A PURE TRUST?

A. "If it is free of control by certificate holders, then it is a Pure Trust."
Schuman Heink v.
Folsom 159. N.E. 250 (1927).

This is one of the many reasons established by legal precedent that PURE TRUSTS are
lawful
and valid organizations as held in Lagett v. Kilbourne, 66 US 346; Coleman v.
Mckee, 257 SW
733; and Reeves v. Powell, 267 SW 328

There is sound legal evidence to support the fact that a true PURE TRUST is not an
services and
would not come under the Missouri Constitutional Provision. Remember that there is
no
"beneficial interest" in a PURE TRUST, unlike statutory trusts. The U.S. supreme
Court stated,
"We perceive no ground for grouping the two -- beneficiaries and Trustees together,
in order to
turn them into an services, by uniting their contrasted functions and powers,
although they are in
no proper sense associated." Hecht v. Malley, 265 US 144

The right to create the Trust is based on the Constitutionally guaranteed Right to
Contract by
individuals establishing it as held in Berry v. McCourt, 204 NE 2d 235. It is not
so much a Trust
as a contractual relationship based on Trust form. "No state shall make any law
impairing the
obligations of contracts," Article 1, Section 10-3, U.S. Constitution.
Commingling of Funds
An attacking attorney may attempt to pierce a Trust by trying to show that you, as
an individual,
and the Trust, are the same person. Therefore, you must not use funds that already
have been
associated with your Social Security number, and associate them with the Trust. If
you use Trust
funds and associate them with an account in your personal name, that is also
commingling.
Commingling can be described by the following examples:

1. If you deposit any salary or paycheck made out to you personally into the
account established
for the Trust, that is considered commingling. If you want the money to end up in
the Trust, the
check that you deposit should be made payable to the name of the Trust. If you
deposit a check
for services rendered that is made out to you (for which you paid no taxes), into
the Trust, that is
commingling (and could be considered tax evasion). If you deposit a check from the
Trust into
an account in your name, that is also commingling.
2. If you take cash out of the account established for the Trust (and it is not
salary, dividends, or
a loan), and spend it on yourself, that is commingling. If you buy an object with
funds from the
Trust account (and it is not salary, dividends, or a loan) and then you record
personal title to that
object, such as an automobile or real estate, that is commingling. However, if you
buy an object
from Trust funds and record the object in the Trust name, that is not commingling.
The primary object is to treat the Trust as a separate entity or third person. For
example, you
would not give money to a third person without something in return, such as an IOU
or stock,
and you would not expect a third person to give you money without something in
return. Do not
commingle!