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1984, until June 30, 1986).108 Accordingly, we sustain respon-
108 Petitioner argues, in the alternative, with respect to BB
Loan No. 1 (as well as BB Loan Nos. 2 and 3, the UB $570,000
renewed loan, and the UB $325,000 loan) that if the Court were to
sustain respondent's determinations, the interest paid after July
18, 1984, by Radcliffe or BOT, as the case may be, would not be
subject to withholding tax because either the interest is portfo-
lio interest or the loan transaction could have been restructured
to qualify the interest paid thereunder as portfolio interest.
On the record before us, we find that petitioner has not demon-
strated that the interest paid by Radcliffe in the BB Loan No. 1
transaction (or in any other Bank loan transaction at issue as to
which he advances this alternative contention) qualifies as
portfolio interest. For example, petitioner has not shown on the
instant record that the interest at issue was not received by a
10-percent shareholder within the meaning of sec. 871(h)(3)(B).
He therefore has not established that sec. 881(c)(3)(B) does not
apply to the interest at issue. With respect to his contention
that BB Loan No. 1 (or any of the other loan transactions as to
which he advances this alternative contention) could have been
restructured to qualify the interest thereon as portfolio inter-
est, we note that a transaction is to be given effect in accord-
ance with what actually occurred, and not with what might have
occurred. See Commissioner v. National Alfalfa Dehydrating and
Milling Co., 417 U.S. 134, 148 (1974).
Petitioner advances an additional alternative argument
relating solely to the BB Loan No. 1 transaction, which is
apparently based upon the parties' erroneous stipulation that the
$1,000,000 standby letter of credit was issued with respect to
petitioner, rather than Radcliffe, see supra note 9. According
to petitioner, if the Court were to sustain respondent's deter-
mination, BB Loan No. 1 would, in substance, be from petitioner
to Radcliffe and, in that event, any interest paid with respect
to that loan would not be subject to withholding under sec.
1441(a) because petitioner was a U.S. citizen during the years at
issue. We disagree. We have found that the $1,000,000 standby
letter of credit was issued with respect to Radcliffe, and not
petitioner. Moreover, on the record before us, we do not find
petitioner's purported promise to indemnify Bangkok Bank HK
branch for any losses it might have incurred with respect to its
$1,000,000 standby letter of credit to have been intended by the
persons involved in the BB Loan No. 1 transaction to be meaning-
ful, at least to the extent of $450,000 of that loan. We there-
fore do not find that that purported personal obligation of peti-
tioner establishes that, in substance, a loan was made to
Radcliffe by petitioner.
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