-17-
published 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, for petitioners to exclude the amounts received from
Development, petitioners must prove that at the time of each
withdrawal, petitioner unconditionally intended to repay the
amounts received and the corporation unconditionally intended to
require payment. Rule 142(a); Haag v. Commissioner, supra at
615-616; Miele v. Commissioner, 56 T.C. 556, 567 (1971), affd.
without published opinion 474 F.2d 1338 (3d Cir. 1973).
Although petitioner asserts that the withdrawals were loans,
a mere declaration by a shareholder that he intended a withdrawal
to constitute a loan is insufficient if the transaction fails to
exhibit more reliable indicia of debt. Williams v. Commissioner,
627 F.2d 1032, 1034 (10th Cir. 1980), affg. T.C. Memo. 1978-306;
Alterman Foods, Inc. v. United States, 505 F.2d 873, 877 (5th
Cir. 1974).11
Whether shareholder withdrawals are bona fide loans is a
question of fact, the answer to which must be based upon a
consideration and evaluation of all surrounding circumstances.
Alterman Foods, Inc. v. United States, supra at 875. Courts have
11
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th
Cir. 1981) (en banc), the Court of Appeals for the Eleventh
Circuit adopted as binding precedent all of the decisions of the
former Court of Appeals for the Fifth Circuit handed down prior
to the close of business on Sept. 30, 1981.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011