Carl E. Jones and Elaine Y. Jones - Page 20

                  Petitioner made more than 40 withdrawals in 1989, more than                         
            70 withdrawals in 1990, and 9 in the first month of 1991.13  The                          
            amounts withdrawn ranged from $350 to $98,753 in 1989,14 $10 to                           
            $166,904 in 1990,15 and $62 to $12,704 in the first month of                              
            1991.  It is clear from the number of withdrawals, the wide range                         
            of the amounts withdrawn, and the uses of the withdrawn amounts                           
            that petitioner used the corporation as his personal pocketbook                           
            from which he could extract funds at will and to which he could                           
            deposit funds at his convenience.  Moreover, if there was a                               
            ceiling on the amounts that petitioner could withdraw, he did not                         
            reach it before Development ceased doing business in 1991.                                
                  Development recorded the withdrawals on its books and                               
            records as loans to petitioner.  While this factor does weigh in                          
            favor of finding the amounts withdrawn were loans, this factor is                         
            not determinative without further evidence substantiating the                             
            existence of bona fide loans.  Baird v. Commissioner, 25 T.C.                             
            387, 394-395 (1955).                                                                      

                  The evidence submitted of petitioner's withdrawals from                             
            Development is limited to the first month in 1991.                                        
                  The explanation on Development's books for the $98,753                              
            increase is "Corporation's assumption of stockholder's liability                          
            to Winterchase Townhomes, Inc."                                                           
                  The explanation for the $166,904 withdrawal recorded on                             
            Development's records is "Transfer of Winterchase lots to Elaine                          
            Jones (net of liabilities assumed)." Although the transfer of                             
            property was to Mrs. Jones, the amount of the transfer was                                
            recorded as an increase (debit) to the loan account.                                      

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