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petitioner's employment relationship or National's future
prospects turned sour. See Mayhew v. Commissioner, T.C. Memo.
1994-310.
Due to the myriad factual circumstances under which debt-
equity questions can arise, not all of the factors are
necessarily relevant to each case. Dixie Dairies Corp. v.
Commissioner, supra at 493-494. We shall discuss below only
those factors germane to the disposition of the instant matter.
1. Name Given to the Certificate
2. Presence or Absence of a Fixed Maturity Date
"[T]he issuance of a bond, debenture, or note is indicative
of a bona fide indebtedness." Estate of Mixon v. United States,
supra at 403. Also, the presence of a definite maturity date
indicates a fixed obligation to repay, which is characteristic of
a debt obligation. Id. at 404. Here, the note issued to
petitioner had a set monthly repayment schedule, which militates
in favor of debt.
3. Source of the Payments
If repayment is possible only out of corporate earnings, the
transaction resembles a capital contribution; if repayment does
not hinge on earnings, the transaction reflects a loan. Id. at
405; Leuthold v. Commissioner, T.C. Memo. 1987-610. In this
case, immediate repayment was not available from National's
existing assets, as National had virtually no resources. The
amount due each month on the Fries note exceeded National's
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