- 14 -
existed for the purported loans, and no record was ever kept of
the amount of money that Mr. Beretta was receiving from the two
restaurants. In addition, the amount of money that Mr. Beretta
skimmed each month depended directly upon the earnings of the
restaurants. These factors indicate that the transfers were not
loans and that the repayments were not loan repayments. Id.
Third, Mr. Beretta concedes that he never received interest
payments on the alleged loans. “[A] true lender is concerned
with interest.” Curry v. United States, 396 F.2d 630, 634 (5th
Cir. 1968). If the lender does not insist on interest payments,
he is, therefore, “interested in the future earnings of the
corporation or the increased market value of his interest.” Id.
Moreover, while the notes evidencing the transfers called for
interest payments, none were actually made. The absence of
interest supports our ultimate finding that the advances were not
loans.
Based on all of the facts and circumstances surrounding the
transfer of funds, we hold that Mr. Beretta's transfers to the
restaurants were not loans. Further, the skimming payments to
petitioner were being divided with his coowners based on
ownership. In that regard, there is no evidence that
petitioner's coowners also had made any advances that could be
considered loans.
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