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position, F. W. Woolworth Co. v. Commissioner, 54 T.C. 1233,
1265-1266 (1970). Even if we were inclined to seek guidance from
the proposed regulations, petitioner's reliance on section
1.7872-2(a)(1), Proposed Income Tax Regs., supra, is misplaced.
That section is an antiabuse provision intended to address a
series of transactions where each individual transaction may not
be a loan, but collectively the series of transactions has the
same effect as a loan. Contrary to petitioner's contention,
section 1.7872-2(a)(3), Proposed Income Tax Regs., 50 Fed. Reg.
33557 (Aug. 20, 1985), rather than section 1.7872-2(a)(1),
Proposed Income Tax Regs., supra, is the relevant section of the
proposed regulations. Section 1.7872-2(a)(3), Proposed Income
Tax Regs., supra, provides that "each extension or [sic] credit
or transfer of money by a lender to a borrower is treated as a
separate loan." Thus, the proposed regulations upon which
petitioner relies provide that each advance should be treated as
a separate loan. Indeed, petitioner reported, on its corporate
balance sheets, each advance as a separate loan.
For authoritative guidance on whether a series of advances
may be treated as individual loans, we turn to the legislative
history of section 7872. The House conference report to DEFRA
states that "any transfer of money that provides the transferor
with a right to repayment may be a loan. For example, advances
or deposits of all kinds may be treated as loans." H. Conf.
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