- 116 -
that, during the years at issue, the banks in question desired to
accommodate, and were susceptible to influence by, petitioner,
Mme. Koo, Radcliffe and/or BOT, and the foreign corporations
pledging collateral that were involved in the Bank transactions.
On the record before us, we conclude that the relationships
during the years at issue of the persons involved in each of the
Bank transactions were such that they are factors we will take
into account in deciding whether the form of each of those trans-
actions should be ignored or recharacterized.83 See Wrenn v.
Commissioner, 67 T.C. at 584; Aiken Indus., Inc. v. Commissioner,
56 T.C. at 934.
b. Horbury Transaction
During all relevant periods, Horbury was a third-tier
subsidiary of Pioneer. Consequently, whoever controlled Pioneer
during those periods also controlled Horbury. As stated above,
the evidence in the record is insufficient to enable us to deter-
mine whether, during the years at issue, petitioner or Mme. Koo
owned a controlling stock interest in, or otherwise controlled,
Pioneer. However, we have found as facts that, prior to and
83 It appears that throughout the period in the years at issue
during which Merit's deposit secured the $570,000 loan to BOT
(viz., from January until early March 1984), Merit owned all of
the stock of Pempire, and thus indirectly all of the stock of
BOT. As stated supra note 76, the parties stipulated that peti-
tioner acquired all the stock of Pempire, and thus indirectly all
of the stock of BOT, a wholly owned subsidiary of Pempire, no
later than July 1984. We will consider the relationship of
Merit, Pempire, and BOT in deciding whether that loan transaction
should be recharacterized.
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