- 7 -
for services which are includable in the recipient's income when
received.
Various objective factors are used in deciding whether an
advance payment is a loan or compensation. See Haag v.
Commissioner, 88 T.C. at 616 n.6., for a listing of some of these
factors. In the instant case, the following factors lead us to
conclude that the advances petitioner received from Robert Randall
Co. should be characterized as compensation, rather than loans:
1. The advances were from an employer to an employee.
2. Petitioner's wage compensation from his previous
employment with Gibraltar was significantly higher than the Form W-
2 wages petitioner received from Robert Randall Co.
3. The monthly advances began as soon as petitioner started
working for Robert Randall Co.
4. The amount of the advances was pre-set.
5. The advances were paid in regular monthly intervals.
6. There were no set repayment terms or fixed maturity date
at the time the advances were made.
7. There was no stated interest.
8. Petitioner had not repaid any of the advances as of the
date of trial.
9. There was no indication that petitioner could repay the
advances from his own resources.
10. The transferor did not inquire into petitioner's
financial status before making the advances.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011