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tioner bears the burden of proof that the amounts in question
were loans and not constructive dividends. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Petitioner testified that the amounts were intended as
loans. His statement of intent must be considered in the context
of the surrounding circumstances. Williams v. Commissioner, 627
F.2d 1032, 1034 (10th Cir. 1980), affg. T.C. Memo. 1978-306.
Courts have typically weighed the following objective factors in
order to determine whether a shareholder's receipts from a
corporation constitute dividends rather than loans:
(a) The taxpayer's degree of control over the corporation;
(b) the existence of restrictions on the amount of
disbursements;
(c) the corporate earnings and dividends history;
(d) the use of customary loan documentation, such as
promissory notes, security agreements or mortgages;
(e) the ability of the shareholder to repay;
(f) the treatment of the disbursements on the corporate
records and financial statements;
(g) the creation of legal obligations, such as payment of
interest, repayment schedules, and maturity dates;
(h) the corporation's attempts to enforce repayment; and
(i) the shareholder's intention or attempts to repay the
loan.
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