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characterization of the transaction herein. Resolution of
whether a transaction is a loan depends in part on the intent of
the parties. Litton Bus. Sys. Inc. v. Commissioner, 61 T.C. 367,
377 (1973). The value of a trial with full opportunity to
observe the parties and their evidence is obvious. This is
especially so when the question of intent is present. Preece v.
Commissioner, 95 T.C. 594 (1990); Shiosaki v. Commissioner, 61
T.C. 861, 863-864 (1974). A conclusion as to a taxpayers' intent
should not be reached without the benefit of a trial in which the
demeanor of the witnesses can be observed and their credibility
can be weighed. Shiosaki v. Commissioner, supra, at 863-864.
In short, the issue is not ripe for summary adjudication.
Petitioner's claim is, in effect, that the documentation controls
the characterization. In order to grant petitioner's motion, we
would have to accept petitioner's interpretation of the documents
relating to the transaction, petitioner's understanding of the
transaction as the understanding of all the parties, and
petitioner's explanation of any apparent discrepancies. By
petitioner's reasoning, Gregory v. Helvering, 293 U.S. 465
(1935), should have been resolved on a motion for summary
judgment because the paperwork documented a reorganization. It
is the substance of the transaction and not the form which must
control the consequences for Federal tax purposes. University
Country Club, Inc. v. Commissioner, 64 T.C. 460, 471 (1975).
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