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1984); Estate of Mixon v. United States, 464 F.2d 394, 404 (5th
Cir. 1972); American Offshore, Inc. v. Commissioner, 97 T.C. 579,
602 (1991).
Moreover, the 1981 transaction occurred when Associates was
suspending business activities due to weakness in the market for
new homes. Petitioner indicated in his testimony that he did not
intend to make a demand for payment and expected that he would be
paid when market conditions improved. However, the record does
not suggest when that improvement might occur. In fact,
Associates did not resume operations until 1985, and petitioner
testified that he did not receive a distribution from Associates
until 1988. The foregoing circumstances indicate that there was
no reasonable expectation that "repayment" of petitioner's "loan"
would occur within a short time. Accordingly, the absence of a
fixed maturity date given Associates' business prospects
indicates that the 1981 transaction was in the nature of a
contribution to its capital. In re Lane, supra at 1316.
Petitioner contends that Associates had sufficient assets to
"repay" his "loan" both at the time that it was made and
subsequently, indicating that Associates was adequately
capitalized and that a reasonable expectation of repayment
existed. Assuming arguendo that Associates' assets were
sufficient for that purpose, it is reasonable to conclude that a
demand for payment would have stripped Associates of assets
needed to carry on its business, such as the model home which it
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