108 T.C. No.8
UNITED STATES TAX COURT
KTA-TATOR, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21013-95. Filed March 11, 1997.
P, a closely held corporation, advanced funds to
its shareholders. The advances were used to pay
expenses relating to construction projects and were not
subject to written repayment terms. After each project
was completed, amortization schedules were prepared and
the shareholders began repaying the advances. Prior to
the shareholder's repayments, P did not report interest
income from the advances. Held: P, pursuant to sec.
7872, I.R.C., has interest income from below-market
demand loans it made to its shareholders.
Kenneth B. Tator (an officer), for petitioner.
Michael A. Yost, Jr., for respondent.
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