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books and records showed that decedent owed $1,724,198 to Beth W.
Corp. when she died.
Beth W. Corp. reported the transfers as loans on its Federal
corporate income tax returns. Beth W. Corp. paid Federal income
tax on interest on the transfers it received from decedent.
Florida required corporations to pay intangible property tax
equal to .1 percent of their assets each year on January 1. Beth
W. Corp. paid Florida about $5,000 per year for intangible
personal property taxes. Beth W. Corp. reported the loans
receivable (i.e., $1,724,1983 it had transferred to decedent and
which decedent had not repaid) as an asset for purposes of the
Florida intangible personal property tax. Beth W. Corp. had
$3,320,165 in other assets.
At quarterly meetings or directors' meetings, Beth W. Corp.
prepared promissory notes which state that decedent owed Beth W.
Corp. the amounts transferred. Decedent applied her name to the
notes with a stamp instead of signing them because she had palsy,
which made it difficult for her to sign her name. Notes for
$483,953 (28 percent) of the amount claimed to be loans were not
offered into evidence; signed notes totaling $1,240,245 (72
percent) of the $1,724,198 were admitted into evidence. Some of
the notes that Beth W. Corp. issued were demand notes and some
3The parties do not explain the difference between the
$1,878,187 of shareholder loans reported in the balance sheet and
the $1,724,198 at issue here.
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