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Commissioner, 800 F.2d 625 (6th Cir. 1986), affg. T.C. Memo.
1985-58; Smith v. Commissioner, 370 F.2d 178, 180 (6th Cir.
1966), affg. T.C. Memo. 1964-278; see Burrill v. Commissioner,
93 T.C. 643, 669 (1989). Courts refer to numerous factors to
determine whether a payment is for debt or equity. The Court of
Appeals for the Sixth Circuit, to which appeal in this case lies,
refers primarily to eleven factors. See Roth Steel Tube Co. v.
Commissioner, supra at 630. These factors are: (1) The names
given to the instruments evidencing the indebtedness; (2) the
presence or absence of a fixed maturity date and schedule of
payments; (3) the presence or absence of a fixed interest rate
and interest payments; (4) the source of repayments; (5) the
adequacy or inadequacy of capitalization; (6) the identity of
interest between the creditor and stockholder; (7) the security
for the advances; (8) the corporation's ability to obtain
financing from outside lending institutions; (9) the extent to
which the advances were subordinated to the claims of outside
creditors; (10) the extent to which the advances were used to
acquire capital assets; and (11) the presence or absence of a
sinking fund to provide repayment. Id.; Raymond v. United
States, 511 F.2d 185, 190-191 (6th Cir. 1975); Austin Village,
Inc. v. United States, 432 F.2d 741, 745 (6th Cir. 1970);
Berthold v. Commissioner, 404 F.2d 119, 122 (6th Cir. 1968),
affg. T.C. Memo. 1967-102; Smith v. Commissioner, supra at 180.
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