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given to the instruments, if any, 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,
if any, 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, supra at 190-191; 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, 370 F.2d 178, 180 (6th Cir. 1966), affg.
T.C. Memo. 1964-278. 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 turn to these factors to determine whether petitioner and
Adult Fun intended to create a debt, and whether their intention
comported with the economic reality of a debtor-creditor
relationship.
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