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motive, at the time of the guaranty, for becoming a guarantor.
United States v. Generes, supra at 104; Harsha v. United States,
590 F.2d 884 (10th Cir. 1979); French v. United States, 487 F.2d
1246 (1st Cir. 1973); Weber v. Commissioner, supra; Smartt v.
Commissioner, supra. When a guarantor of a corporate debt is a
shareholder of the corporation, as well as one of its employees,
mixed motives for the guaranty are usually present, and the
critical fact is which motive is dominant. United States v.
Generes, supra at 100. The dominant motive must be business
related, as opposed to investment related, for a guaranty to be
business related. See Smith v. Commissioner, 60 T.C. 316, 319
(1973). A motive is business related when the guarantor aims to
increase or protect his or her salary from the debtor
corporation. A motive is investment related when the guarantor
aims to increase or protect the value of his or her stock in the
debtor corporation. See Weber v. Commissioner, supra. Objective
facts weigh more heavily then the guarantor's unsupported
statements of subjective intent in measuring his or her motive.
Kelson v. United States, 503 F.2d 1291 (10th Cir. 1974).
Following our detailed review of the record, we are not
persuaded that petitioner's dominant motive in guaranteeing the
Loan was business related. Indeed, we read the record to point
to the opposite conclusion. Petitioner testified that he
expected EPC's business to prosper as a result of the Loan, and
that this, in turn, would increase the value of his EPC stock.
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