Revenue Act of 1938 and the Internal Revenue Code, and are in the margin.3

The respondent concedes that the trust instruments contain no specific provision for alteration, amendment, or revocation by grantors. He contends, however, that the trust provisions reserved to J. M. Leonard, trustee, an unqualified right to direct sales of trust property to himself or others at his own price and on his own terms and that such rights and powers in and to the corpora are sufficiently broad to support a finding that they are equivalent to a power to revest and that, therefore, the income is taxable to the grantors under section 166, citing Chandler v. Commissioner, 119 Fed. (2d) 623, affirming 41 B. T. A. 165. We find no such provisions in any of the trust instruments as respondent contends above. There is no language in any of the trust indentures which would justify the interpretation which respondent seeks to impose. The facts in the instant proceedings are entirely unlike those present in the Chandler case. In that case Chandler as settlor transferred property to a trust company as trustee for his wife as beneficiary. Among other things the trust agreement provided:

During the lifetime of Grantor, Trustee shall make such sale, exchange or other disposition either to Grantor or to a third party or third parties designated by him of all or any part of the Trust Fund and for such considerations and upon such terms as to credit or otherwise as Grantor shall at any one time or from time to time direct. Trustee shall also acquire by purchase, exchange or otherwise such real or personal property for such considerations and either from Grantor or from such third party or third parties as Grantor may at any one time or from time to time direct. Grantor may be personally interested in the sale, exchange or other disposition of any part of the Trust Fund and/or in the purchase, exchange or other acquisition of real and/or of personal property for the Trust Fund. Trustee shall at all times and forever be freed from any and all liability and responsibility for acting in accordance with such directions of Grantor.

The Third Circuit properly pointed out the important distinction between the power reserved by the settlor in that case and that in other cases where the power to control reserved by the settlor did not include the power to direct the trustee to buy from and sell to the settlor at prices fixed by the latter. In such latter cases, the court said the power was reserved for the benefit of the beneficiary of the trust, whereas in cases like Chandler, the power was reserved solely for the benefit of the settlor rather than for the beneficiary. An examination

SEC. 166. REVOCABLE TRUSTS.

Where at any time the power to revest in the grantor title to any part of the corpus of the trust is vested

(1) in the grantor, either alone or in conjunction with any person not having a substantial adverse interest in the disposition of such part of the corpus or the income therefrom, or

(2) in any person not having a substantial adverse interest in the disposition of such part of the corpus or the income therefrom,

when the income of such part of the trust shall be included in computing the net income of the grantor.

of the six trust instruments involved in the instant proceedings reveals, as we have already stated, no provisions like those contained in the Chandler case. We hold, therefore, that petitioners in Docket Nos. 555 and 556 are not taxable on any part of the income of the six trusts under section 166. See Carleton H. Palmer, supra; Frederick Ayer, supra; and Herbert T. Cherry, supra.

Is the income of the six trusts taxable to the grantors thereof under section 167? Petitioners have alleged that the income is not so taxable and the respondent has apparently so conceded, as he has not argued or even mentioned the question in his brief. In any event, we agree with the petitioners on this point. The 1938 trusts permitted the trustee "only in the event the grantors as parents are unable to support the beneficiary" from other sources to make such advances from income or principal as in his sole discretion he deems proper at any time for the maintenance, upkeep, education, travel, and general welfare of the beneficiary until she shall have attained the age of 21 years. The 1940 trusts contained no such provisions. Instead, the trustee was prohibited from making any distribution to the beneficiary of either corpus or income until the beneficiary attained the age of 21 years. No distributions from any of the trusts have been made. The grantors at all times provided for the education, maintenance, and support of their minor children from their own personal funds and were amply able to so provide. Under these circumstances we hold that, even without the benefit of section 134 of the Revenue Act of 1943, no part of the income of the six trusts is taxable to the grantors thereof under section 167. Robert P. Scherer, 3 T. C. 776, 797-798. The grantors, however, have filed with the Commissioner certain agreements in accordance with the requirements of I. T. 3609, Cumulative Bulletin 1943, p. 505, and have agreed to execute and file such other and further agreements and consents as may be required to comply with T. D. 5392, Internal Revenue Bulletin, August 11, 1944, p. 18. It is assumed that this Court will allow a reasonable time for petitioners to comply with these requirements if deemed necessary. Estate of O. M. Banfield, 4 T. C. 29, 34.

Since the grantors of the six trusts in question are not taxable on any part of the income of the trusts under section 22 (a), 166, or 167, supra, it follows that the income thereof is taxable to the trusts under the provisions of section 161 of the Revenue Act of 1938 and of the Internal Revenue Code.

Reviewed by the Court.

In Docket Nos. 555 and 556 decisions will be entered under Rule 50. In Docket Nos. 578, 577, and 579 decisions will be entered for the respondent.