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guaranty to be proximately related to the taxpayer's trade or
business. Putoma Corp. v. Commissioner, 66 T.C. 652, 673 (1976),
affd. 601 F.2d 734 (5th Cir. 1979); see United States v. Generes,
supra.
A motive is business related when the taxpayer seeks to
increase or protect the taxpayer's salary to be paid from the
debtor corporation. Putoma Corp. v. Commissioner, supra at 674.
A motive is investment related when the taxpayer aims to increase
or protect the value of the taxpayer's stock in the debtor
corporation. See United States v. Generes, supra; Weber v.
Commissioner, supra. In deciding the taxpayer's motive for
purposes of section 166, however, we examine the objective facts
surrounding the loans rather than the taxpayer's subjective
intent. Kelson v. United States, 503 F.2d 1291, 1293 (10th Cir.
1974) (citing United States v. Generes, supra).
Characterization of an advance as either a loan or capital
contribution is a question of fact which must be answered by
reference to all of the evidence, with the burden on the taxpayer
to establish that the alleged loans were bona fide debt. Rule
142(a); Dixie Dairies Corp. v. Commissioner, 74 T.C. 476, 493
(1980); Yale Ave. Corp. v. Commissioner, 58 T.C. 1062, 1073-1074
(1972). Objective factors are to be considered, and the
taxpayer's subjective intent alone is not determinative of the
issue of characterizing an advance as debt or equity. United
States v. Uneco, Inc. (In re Uneco, Inc.), supra at 1209.
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