- 8 -
Realty Co. v. United States, supra at 697. The ultimate question
is whether there was a genuine intention to create a debt, with a
reasonable expectation of repayment, and if that intention
comported with the economic reality of creating a debtor-creditor
relationship. Litton Bus. Sys., Inc. v. Commissioner, 61 T.C.
367, 377 (1973).
Applying the relevant factors to the present facts, it
becomes evident that petitioner did not intend to establish a
debtor-creditor relationship with FWC, CAI, and ASC. Instead,
the contributions made by petitioner were in actuality equity
investments in the common owner’s companies.
First, we look at the particulars of the transaction,
including the name given to the certificates of debt and the
presence or absence of a maturity date or a repayment schedule to
indicate debt or equity. Petitioner never used any certificate
or instrument to memorialize the debt; no loan agreements or
notes were ever signed. Nor did petitioner set a fixed maturity
date or a repayment schedule for the three companies. The
absence of a maturity date on a note weighs against finding that
the transfers were loans. Stinnett’s Pontiac Serv. Inc. v.
Commissioner, 730 F.2d 634, 638 (11th Cir. 1984), affg. T.C.
Memo. 1982-314. Moreover, petitioner failed even to show that a
predetermined interest rate applied or that the interest accrued
on the advances was at market rate. See Rule 142(a) (petitioner
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