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allegedly insolvent corporation. These are economic matters not
just of form but also of substance.
The evidence establishes that in both form and substance the
overdraft amount should be treated as a loan from Citibank Tokyo
to Nihon Intergraph and not as a loan from Citibank Tokyo to
Intergraph.
Further, the evidence does not establish that, for purposes
of section 988 and section 163(a), Intergraph should be treated
as a co-obligor on the overdraft amount. The Overdraft Agreement
lists Nihon Intergraph as the only obligor on the overdraft
amount. Intergraph signed only the Guaranty Agreement and did
not sign the Overdraft Agreement as co-obligor.
Petitioner relies on Larson v. Commissioner, 44 B.T.A. 1094
(1941), affd. 131 F.2d 85 (9th Cir. 1942), and Rev. Rul. 71-179,
1971-1 C.B. 58. In Larson and in Rev. Rul. 71-179, the taxpayer
cosigned with her child a promissory note, and the taxpayer was
jointly and severally liable on the promissory note. In the
instant case, Intergraph did not cosign the Overdraft Agreement,
and Citibank Tokyo looked primarily to Nihon Intergraph and only
secondarily to Intergraph for payment of the overdraft amount.
After considering all of the facts and circumstances, we
conclude that the loan from Citibank Tokyo was made to Nihon
Intergraph. Intergraph's obligation thereon represented that of
a mere guarantor, and Intergraph's payment of the �823,943,385 to
eliminate the overdraft amount constituted Intergraph's payment
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