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express obligation to repay that does not require the payor
to purchase goods or services. Therefore, if the payor
fulfills his legal obligations, then the loan will be
refunded to him. Id. at 209. In the case of an advance
payment, on the other hand, the payor retains no right to
insist upon return of the funds so long as the recipient
fulfills the terms of the bargain, and the recipient is
assured that so long as he fulfills his contractual
obligations, then he can keep the money. Id. at 210-211.
In distinguishing between loans and advance payments,
an important factor is whether the payor or the recipient
controls the conditions under which repayment or refund
of the amount at issue will be made. See id. at 212. In
Commissioner v. Indianapolis Power & Light Co., supra, the
payor, the utility customer, controlled the timing and the
method of the refund of his or her deposit. Id. at 209.
Based upon that fact, the Court held that the recipient,
the utility company, did not have a guaranty that it would
be allowed to keep the money, and thus, it did not enjoy
complete dominion over the funds. Id. at 211. Therefore,
if the payor controls the conditions under which the money
will be repaid or refunded, generally, the payment is not
income to the recipient. See Highland Farms, Inc. v.
Commissioner, 106 T.C. ____ (1996) (entrance fees paid to
retirement community to occupy apartments or lodges);
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