- 14 - Offshore, Inc. v. Commissioner, 97 T.C. 579, 602 (1991). Whether a transfer creates a debt is a question of fact, for which the taxpayer bears the burden of proof. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Bauer v. Commissioner, 748 F.2d 1365, 1368 (9th Cir. 1984), revg. T.C. Memo. 1983-120; A. R. Lantz Co. v. United States, 424 F.2d 1330, 1334 (9th Cir. 1970); Crown v. Commissioner, 77 T.C. 582, 598 (1981); Gilbert v. Commissioner, 74 T.C. 60, 64 (1980). The key to this factual determination turns primarily on the taxpayer's actual intent, as shown by the circumstances and condition of the transfer. Bauer v. Commissioner, supra at 1367-1368; A. R. Lantz Co. v. Commissioner, supra at 1333. In passing on this intent, the Court of Appeals for the Ninth Circuit, to which appeal in this case lies, has considered 11 factors. These factors, which are not equally significant and none of which is controlling by itself, are: (1) The names given to the certificates evidencing the indebtedness, (2) the presence or absence of a fixed maturity date, (3) the source of payments, (4) the right to enforce the payment of principal and interest, (5) participation in management as a result of the advances, (6) a status of the advances equal to or inferior to that of regular corporate creditors, (7) the intent of the parties, (8) the identity of interest between creditor and stockholder, (9) a thin or adequate capitalization, (10) the ability of the corporation to obtain loans from outside sources, and (11) the payment of interest onlyPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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