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Litton Business Sys., Inc. v. Commissioner, 61 T.C. 367, 379
(1973).
Petitioner presented no evidence on whether it could have
obtained financing from an unrelated party at the time of the
transfer, or on the order of priority of its debts. Given the
fact, however, that the purported debts were completely unsecured
and that the subject properties were petitioner’s main asset, we
are left unpersuaded that an unrelated third party would have
entered into financing with petitioner under the terms that it
alleges were entered into between it and Mr. Mohney.
This factor weighs toward equity.
ix. Subordination
Subordination of purported debt to the claims of other
creditors weighs towards equity. Roth Steel Tube Co. v.
Commissioner, supra at 631-632; Stinnett's Pontiac Serv. Inc. v.
Commissioner, supra at 639; Raymond v. United States, supra at
191; Austin Village, Inc. v. United States, supra at 745.
Petitioner presented no evidence on the order of priority of
its debts.
This factor weighs toward equity.
x. Use of Funds
The transfer of funds from a shareholder to a corporation in
order to meet the corporation’s daily business needs weighs
toward debt. The transfer of funds from a shareholder to a
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