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between creditor and stockholder; (10) the source of interest
payments; (11) the ability of the corporation to obtain loans
from outside lending institutions; (12) the extent to which the
advance was used to acquire capital assets; and (13) the failure
of the debtor to repay on the due date or to seek a postponement.
Estate of Mixon v. United States, 464 F.2d 394 (5th Cir. 1972);
see also Lane v. United States (In re Lane), 742 F.2d 1311 (11th
Cir. 1984); Stinnett's Pontiac Serv., Inc. v. Commissioner, 730
F.2d 634 (11th Cir. 1984), affg. T.C. Memo. 1982-314.
A shareholder/taxpayer seeking to treat an advance to a
corporation as a loan bears the burden of proof on the point,
Rule 142(a); Dixie Dairies Corp. v. Commissioner, supra, as do
petitioners in this case. Transactions between a shareholder and
a closely held corporation require special scrutiny. Gilboy v.
Commissioner, T.C. Memo. 1978-114.
Taking into account the above factors, we first consider
whether the $475,000, or any portion thereof, constituted a loan,
or loans, for Federal income tax purposes. Petitioners contend
that as of December 20, 1991, the entire $475,000 represented a
worthless bona fide debt, within the meaning of section
166(a)(1), owed to petitioner from BCBI. They further argue that
no part of the debt constitutes a nonbusiness debt within the
meaning of section 166(d), and therefore they are entitled to a
business bad debt deduction in the amount of $475,000 for the
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