Raymond R. Weigel - Page 11

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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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