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period under the terms of the note. Rather, the
Commissioner found that all parties to the loan knew that
the trustee intended to exercise his unilateral authority
to extend it. In concluding that the loan was modified
after December 31, 1986, the Commissioner stated:
[The taxpayer] acknowledges that the delay
in payment was discussed with the [other
participants in the plan] and the [other
participants] knew that no attempt would be
made to demand payment. Therefore, it appears
that the provision in the original loan giving
the trustee unilateral authority to extend the
loan was acted on, and the document [containing
the written extensions] indicates the trustee did
extend the loan. Even if the extension agreement
was prepared after the fact, it appears in this
closely held company that all parties involved
knew that the trustee was extending the loan.
Accordingly, the loan is to be treated as a new
loan on the date of extension, and is therefore
subject to the level amortization requirement.
[Tech. Adv. Mem. 93-44-001 (November 5, 1993).]
In contrast, there is no evidence in this case that
the parties to the loan transactions intended or agreed to
modify or change the terms of the loans after December 31,
1986, and thus there is no basis to find that the 1986 Act
amendments are applicable. First, petitioners stipulate
that there is no written document or notation evidencing a
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