-47-
opinion 855 F.2d 855 (8th Cir. 1988); Litton. Bus. Sys., Inc. v.
Commissioner, 61 T.C. 367, 377 (1973); 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).
Thus, before the value of decedent's estate may be reduced
for the alleged debt, petitioner must prove that at the time of
each transfer, decedent and the JKH Trust agreed that decedent
would borrow $50,000, that decedent unconditionally intended to
repay that amount to the JKH Trust, and that the JKH Trust
intended to unconditionally secure repayment. Rule 142(a); Welch
v. Helvering, 290 U.S. at 115.
The determination of whether a transfer was made with a real
expectation of repayment and an intention to enforce the debt
depends on all the facts and circumstances including whether: (1)
There was a promissory note or other evidence of indebtedness,
(2) interest was charged, (3) there was security or collateral,
(4) there was a fixed maturity date, (5) a demand for repayment
was made, (6) any actual repayment was made, (7) the transferee
had the ability to repay, (8) any records maintained by the
transferor and/or the transferee reflected the transaction as a
loan, and (9) the manner in which the transaction was reported
for Federal tax is consistent with a loan. See Zimmerman v.
United States, 318 F.2d 611, 613 (9th Cir. 1963); Estate of
Maxwell v. Commissioner, 98 T.C. 594, 604 (1992), affd. 3 F.3d
591 (2d Cir. 1993); Estate of Kelley v. Commissioner, 63 T.C.
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