-14-
Templeman, of his potential liability for Tag Coal's outstanding
employment taxes and that the loan was thus personal in nature.
Petitioner contends that this dominant motivation for making the
loan was to "keep the equipment working", thereby protecting J &
M's ability to lease, as lessor, such equipment to its clients.
Although petitioner's loan to Tag Coal undoubtedly benefited
Mrs. Lykins' son, Mr. Templeman, we do not think that the desire
to confer such benefit was the controlling factor in petitioner's
decision to make a loan to Tag Coal. Rather, for the following
reasons, we think that the motivation for making the loan was as
articulated by petitioner and that such motivation was
proximately related to his trade or business of leasing
equipment.
The IRS had informed Tag Coal that if the corporation did
not pay its outstanding employment tax liability, the IRS would
proceed against the assets held by J & M to satisfy such
liability. If petitioner had not loaned money to Tag Coal, and
if the IRS had proceeded against J & M's assets; i.e. the
equipment, J & M would not have had equipment to lease to its
clients. This would have effectively precluded petitioner from
carrying on his trade or business of leasing equipment.
In addition, Tag Coal was the primary lessee and customer of
J & M. Since petitioner is a 50-percent partner in J & M, we can
readily accept his testimony concerning his desire to "keep Tag
afloat".
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011