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failure of the corporations to repay; and (13) the risk involved
in making the transfers. Id.
These factors serve only as aids in evaluating whether
transfers of funds to a closely held business should be regarded
as capital contributions or as bona fide loans. Boatner v.
Commissioner, T.C. Memo. 1997-379. No single factor is
controlling. Dixie Dairies Corp. v. Commissioner, supra. As
expressed by this Court, the ultimate question is "Was there a
genuine intention to create a debt, with a reasonable expectation
of repayment, and did that intention comport with the economic
reality of creating a debtor-creditor relationship?" Litton
Business Sys., Inc. v. Commissioner, 61 T.C. 367, 377 (1973).
We find that Mr. Beretta's transfers of funds to the
entities that controlled the Atascadero and Salinas Peppertree
Restaurants were not loans. Only the factors material to our
decision will be discussed.
First, the notes that evidenced the contributions to HRB
Enterprises had no maturity date. The absence of a maturity date
with respect to a note weighs against finding that the transfers
were loans. Stinnett's Pontiac Serv., Inc. v. Commissioner, 730
F.2d 634, 638 (11th Cir. 1984), affg. T.C. Memo. 1982-314.
Second, the source of “repayments” for the transfers was
highly unusual. Mr. Beretta had employees skim money directly
from the cash registers on his behalf. No repayment schedule
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