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their purported loans to the loans of the corporations'
creditors; (7) the intent of the taxpayers and the corporations;
(8) whether the taxpayers who are claiming creditor status were
also shareholders of the corporations; (9) the capitalization of
the corporations; (10) the ability of the corporations to obtain
financing from outside sources at the time of the transfers; (11)
how the funds transferred were used by the corporations; (12) the
failure of the corporations to repay; and (13) the risk involved
in making the transfers. Calumet Indus. Inc. v. Commissioner, 95
T.C. 257, 285 (1990); Dixie Dairies Corp. v. Commissioner, supra
at 493.
These factors serve only as aids in evaluating whether
transfers of funds to closely held corporations should be
regarded as capital contributions or as bona fide loans. Fin Hay
Realty Co. v. United States, 398 F.2d 694, 697 (3d Cir. 1968).
No single factor is controlling. Dixie Dairies Corp. v.
Commissioner, supra at 493. The taxpayer must reasonably expect
that the money he advances will be repaid. Arrigoni v.
Commissioner, 73 T.C. 792, 799 (1980). Consequently, gifts and
capital contributions to a corporation are not bona fide debts.
Sec. 1.166-1(c), Income Tax Regs.
Transfers to closely held corporations by controlling
shareholders are subject to heightened scrutiny, and labels
attached to such transfers by the controlling shareholders
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