Billie and Florence Lykins - Page 9

          satisfy J & M's other outstanding liabilities.  Apparently,                 
          respondent interprets the contemporaneity of these events to                
          support her contention.  However, we draw no such inference from            
          the timing of these events.  Rather, we think that petitioner, in           
          two contemporaneous but separate transactions, assumed                      
          approximately $700,000 of liabilities in exchange for his                   
          interest in J & M and made a loan to Tag Coal.  We reach this               
          conclusion by applying the above mentioned factors to the facts             
          of this case.                                                               
               First, the parties genuinely intended the amount advanced by           
          petitioner to be a loan.  Petitioner and Mr. Templeman both                 
          testified at trial that they considered the advance to be a loan.           
          We found petitioner and Mr. Templeman to be credible witnesses,             
          and we have no reason to question their veracity.                           
               Second, the parties' intent is confirmed by written                    
          instruments characterizing the advance as a loan.  For example,             
          in a document styled "Agreement" dated August 30, 1984, the                 
          amount advanced by petitioner is referred to as a "loan made to             
          Tag Coal Corporation for delinquent taxes in the amount of                  
          $175,970.51."  Additionally, petitioner referred to the payment             
          as a loan on the memo line of the check issued to Tag Coal.                 
          Finally, the advance was recorded as a loan on Tag Coal's                   
          corporate books.                                                            
               Third, within approximately one year after the advance, Tag            
          Coal repaid petitioner $44,806.72 of the $175,970.51 advanced.              

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