- 25 - when the payment is made. French v. United States, supra at 1248; Smartt v. Commissioner, supra; Modell v. Commissioner, T.C. Memo. 1983-761; Cho v. Commissioner, T.C. Memo. 1976-318.6 Petitioner personally guaranteed payment of the entire floor plan loan as early as July 31, 1988. The last record of an extension of the guarantee, on October 15, 1989, however, reflects that petitioner signed a promissory note to extend the floor plan loan to December 1, 1989. We are unable to view the extension(s) of the guarantee as a new commitment. As its nomenclature indicates, an "extension" merely continues the original obligation. Thus, petitioner's motivation with respect to the floor plan arrangement is measured as of July 31, 1988. 1. Petitioner's Investment--Petitioner owned all the outstanding stock of the corporate dealership. His total contribution was composed of two amounts each approximating $400,000. The first $400,000 was comprised of petitioner's liquid assets of $250,000 and a $150,000 note. In attempting to minimize the relative size of his investment in the dealership, petitioner argues that it would not 6 The statute and the regulations do not tell us at what point in time we should look to determine proximity in a guaranty context. * * * [Case precedent holds] that the time to determine proximity is the time when petitioner entered into his guarantee agreements. [Cho v. Commissioner, T.C. Memo. 1976-318.]Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
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