Cerand & Company, Inc. - Page 7

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          States, 424 F.2d 1330 (9th Cir. 1970) (11 factors); Fin Hay                 
          Realty Co. v. United States, supra (16 factors); Georgia-Pacific            
          Corp. v. Commissioner, 63 T.C. 790 (1975) (13 factors).  The                
          factors considered include:  (1) The names given to the                     
          certificates evidencing the indebtedness; (2) presence or absence           
          of a fixed maturity date; (3) source of payments; (4) right to              
          enforce payments; (5) participation in management as a result of            
          the advances; (6) status of the advances in relation to regular             
          corporate creditors; (7) intent of the parties; (8) identity of             
          interest between creditor and stockholder; (9) “thinness” of                
          capital structure in relation to debt; (10) ability of                      
          corporation to obtain credit from outside sources; (11) use to              
          which advances were put; (12) failure of debtor to repay; and               
          (13) risk involved in making advances.  Dixie Dairies Corp. v.              
          Commissioner, 74 T.C. 476, 493-494 (1980).                                  
               The identified factors are not equally significant.  Estate            
          of Mixon v. United States, supra at 402.  Nor is any one factor             
          determinative or relevant in each case due to the countless                 
          factual circumstances possible.  John Kelley Co. v. Commissioner,           
          326 U.S. 521, 530 (1946).  “The various factors * * * are only              
          aids in answering the ultimate question whether the investment,             
          analyzed in terms of its economic reality, constitutes risk                 
          capital entirely subject to the fortunes of the corporate venture           
          or represents a strict debtor-creditor relationship.”  Fin Hay              





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