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any amount of the debt with Frost Bank for the years in issue.
On the bank notes, petitioner and DRPC are cosigners. Respondent
asserts that petitioner is an accommodation party to the notes,
while petitioner claims that the corporation was the
accommodation party. The notes themselves, as in Harrington v.
United States, supra, do not shed light on who the actual debtor
may be. The principal beneficiary of the proceeds in this case
was the corporation. While petitioner may have received a
portion of the proceeds for his personal use, the corporation was
the primary beneficiary.
In this case, there is one factor different than in
Harrington, and that is rather than a shareholder making a
personal guaranty, as in Harrington, here there was a third-party
guarantor, Don Test, who was actually paid by the corporation.
We feel that this is much stronger evidence that the corporation
was the primary obligor, and that petitioner was the
accommodation party. In Harrington, the shareholders themselves
guaranteed the debt, and this did not give rise to basis. Here,
the shareholder did not even pay for the third-party guaranty.
The debt was allegedly ultimately extinguished by Don Test, the
paid guarantor, after the years in issue. At that time,
petitioner says he paid Don Test. If this payment had been made
during the years in issue, we might have found that it gave rise
to basis, but that question is not properly before us. We
therefore find that petitioner is an accommodation party to the
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