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motion to quash to the date of entry of the court's order was 83
days. Thus, even without taking into account the period during
which the petition to quash the original summons was pending, or
the period for an appeal, we find that the notice of deficiency
was issued to petitioners within the period of limitations. See
sec. 7609(e)(1).
The second issue for decision is whether petitioners had
$15,000 of unreported Schedule C income for 1991. Petitioners
contend that the funds in question were loans from the Herkeios
Group. Borrowed funds are excluded from a taxpayer's gross
income, "because the taxpayer's obligation to repay the funds
offsets any increase in the taxpayer's assets". United States v.
Centennial Sav. Bank FSB, 499 U.S. 573, 582 (1991). The
hallmarks of a loan are: (1) Consensual recognition between the
borrower and the lender of the existence of the loan (i.e., the
obligation to repay); and (2) a bona fide intent on the part of
the borrower to repay the funds advanced. Collins v.
Commissioner, 3 F.3d 625, 631 (2d Cir. 1993), affg. T.C. Memo.
1992-478. Whether a debtor-creditor relationship exists is a
question of fact. Beaver v. Commissioner, 55 T.C. 85, 91 (1970);
Fisher v. Commissioner, 54 T.C. 905, 909 (1970). Petitioners
bear the burden of proof. Rule 142(a); Welch v. Helvering, 290
U.S. 111, 115 (1933).
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