AMW Investments, Inc. - Page 23

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          corporation in order to purchase capital assets weighs toward               
          equity.  Roth Steel Tube Co. v. Commissioner, supra at 632;                 
          Stinnett's Pontiac Serv. v. Commissioner, supra at 640;                     
          Raymond v. United States, supra at 191.                                     
               The subject properties were petitioner’s initial and primary           
          assets, and the purported notes represented a long-term                     
          commitment that was payable mainly from the future rental income            
          from the properties.  We also find relevant that Mr. Mohney was             
          willing to go unpaid for many years so that petitioner could                
          continue to enjoy the advantage of uninterrupted ownership of the           
          properties.                                                                 
               This factor weighs toward equity.                                      
               xi.  Presence or Absence of a Sinking Fund                             
               The failure to establish a sinking fund for repayment weighs           
          toward equity.  Roth Steel Tube Co. v. Commissioner, supra at               
          632; Lane v. United States, 742 F.2d at 1317; Raymond v. United             
          States, supra at 191; Austin Village, Inc. v. United States,                
          supra at 745.                                                               
               The record does not indicate that petitioner established a             
          sinking fund for the repayment of the purported notes.  To the              
          contrary, it appears that repayment was to come solely from                 
          petitioner's earnings.                                                      
               This factor weighs toward equity.                                      







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