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shareholders for repayment of the putative loan when their
relationship began to deteriorate, there was no evidence of any
requests for repayment by petitioner. See Davies v.
Commissioner, 54 T.C. 170, 176 (1970). Moreover, nothing
explains petitioner's failure to avoid the problem in the first
place by either securing the note or by setting up a sinking
fund.
5. Status of the Contribution in Relation to Regular
Corporate Creditors
Subordination of a putative loan to that of another creditor
typifies a contribution to capital. Tomlinson v. 1661 Corp., 377
F.2d 291, 297-298 (5th Cir. 1967). National repaid about
$100,000 on the Action note, but failed to pay anything at all on
the previously executed Fries note. While the terms of the Fries
note did not mention subordination, petitioner acquiesced in a de
facto subordination by failing to demand repayment while
continuing to sign checks for the Action note. See Smithco
Engg., Inc. v. Commissioner, T.C. Memo. 1984-43.
6. Intent of the Parties
The intent of the parties weighs heavily in determining the
debt versus equity question, but subjective intent does not
suffice to alter the relationship or duties created by an
otherwise objectively indicated intent. In re Lane, 742 F.2d at
1311. Conclusory and self-serving statements by taxpayers that
they intended to create debts have been accorded little weight by
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