- 16 -
where the transferor and transferee are related. Hardman v.
United States, supra at 1412. The mere fact that the transferor
and the transferee are related, however, does not necessarily
mean that any transfer between them lacks economic substance.
Id.
Based on our careful review of the entire record, and after
evaluating each of the 11 factors mentioned above, we answer the
four questions set forth immediately above in the affirmative.
The record points to the conclusion that the advances were loans
from petitioner to Kenilworth. Although the tangible
documentation for the advances is less than complete, we conclude
from the record that petitioner and Kenilworth intended to create
a debtor-creditor relationship, that their intent was consistent
with the economic reality of creating a debtor-creditor
relationship, that petitioner wanted Kenilworth to repay each
advance timely and expeditiously, that Kenilworth intended to
repay each advance in that manner, and that an unrelated lender
would have advanced funds to Kenilworth in a fashion similar to
that employed by petitioner.
Before setting forth our analysis of the 11 factors,
we pause briefly to state our view of the relevant witnesses.
With respect to Mr. Roven and Ms. Martin, the two witnesses who
testified on behalf of petitioner, we find them to be credible in
their testimony that the advances were intercompany loans.
Whereas respondent would have us minimize their testimony and
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