AMW Investments, Inc. - Page 17

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          In distinguishing debt from equity, the economic substance of the           
          transaction prevails over form.  Byerlite Corp. v. Williams,                
          286 F.2d 285, 291 (6th Cir. 1960).                                          
               We now analyze and weigh all relevant facts to determine               
          whether petitioner and Mr. Mohney intended to create a debt, and            
          whether their intention comported with the economic reality of a            
          debtor-creditor relationship.  Petitioner carries the burden of             
          establishing that the subject transfers generated debt rather               
          than equity.  Rule 142(a).                                                  
               i.   Name of Certificate                                               
               We look to the name of the certificate evidencing purported            
          debt to determine the “debt’s” true label.  The issuance of a               
          note weighs toward debt.  Estate of Mixon v. United States,                 
          464 F.2d 394, 403 (5th Cir. 1972).  The mere fact that a taxpayer           
          issues a note, however, is not dispositive of debt.  An unsecured           
          note, with no payments made thereon until long after the due                
          date, weighs toward equity.  Stinnett's Pontiac Serv. v.                    
          Commissioner, 730 F.2d 634, 638 (11th Cir. 1984), affg. T.C.                
          Memo. 1982-314.                                                             
               Although petitioner issued the Second Clarksville note to              
          Mr. Mohney, we give this fact little weight.  The record shows              
          that the transfer of the subject properties to petitioner                   
          occurred in 1977, yet the related deeds were not recorded until             
          sometime thereafter.  We also find that Mr. Mohney's                        

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