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Respondent concedes that petitioner's transfer of $350,000
to Swirl has all the formal indicia of a loan; e.g., Swirl gave
two promissory notes that provided for the payment of interest in
exchange for the transfer; Swirl treated the transfer as a loan
on its financial statements and tax return; and petitioner
reported Swirl's payments as interest income on his tax returns.
This factor suggests that the transfer was a loan.
b. Whether the Party Providing the Funds Can
Enforce Payment
A definite obligation to repay an advance suggests that it
is a loan. American Offshore, Inc. v. Commissioner, supra at
603. Petitioner had the right to enforce payments on the notes.
If any payment was past due, petitioner could accelerate the
payments due on the notes and collect those amounts and any
remaining principal. This factor suggests that the transfer was
a loan.
c. Whether There Is a Fixed Maturity Date
The absence of a fixed maturity date suggests that a
transfer is equity. American Offshore, Inc. v. Commissioner,
supra at 602. Swirl’s promissory notes included a fixed maturity
date. However, respondent points out petitioner agreed to delay
the maturity date of the notes from April 1 to September 15,
1988, and then to October 15, 1988. Respondent cites Ambassador
Apartments, Inc. v. Commissioner, 50 T.C. 236 (1968), affd. 406
F.2d 288 (2d Cir. 1969) for the proposition that the delay in the
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