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reported that decedent owed $1,724,198 to Beth W. Corp. when she
died.
OPINION
A. Whether the Transfers from Beth W. Corp. to Decedent Are
Loans or Dividends
1. Background and Contentions of the Parties
Petitioner contends that the transfers from Beth W. Corp. to
or on behalf of decedent are loans which decedent owed to Beth W.
Corp. during her life and which are deductible as a claim against
decedent's estate under section 2053(a).
A transfer of money is a loan for Federal income tax
purposes if, at the time the funds were transferred, the
transferee unconditionally intended to repay the money, and the
transferor unconditionally intended to secure repayment. Haag v.
Commissioner, 88 T.C. 604, 616 (1987), affd. without published
opinion 855 F.2d 855 (8th Cir. 1988); see also Haber v.
Commissioner, 52 T.C. 255, 266 (1969), affd. 422 F.2d 198 (5th
Cir. 1970); Saigh v. Commissioner, 36 T.C. 395, 419 (1961).
Respondent concedes that if we decide that the transfers at
issue are loans, then they are included in the value of the stock
of Beth W. Corp., and petitioner may deduct the amount of the
unpaid transfers as a claim against the estate under section
2053.
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