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Smith v. Commissioner, 370 F.2d 178, 180 (6th Cir. 1966), affg.
T.C. Memo. 1964-278; Haag v. Commissioner, supra at 616 n.6.
The above factors are not exclusive, and no one factor is
dispositive. See John Kelley Co. v. Commissioner, 326 U.S. 521,
530 (1946); Smith v. Commissioner, supra. The factors are simply
objective criteria helpful to the Court in analyzing all relevant
facts and circumstances. The ultimate question remains whether
"there [was] a genuine intention to create a debt, with a
reasonable expectation of repayment, and did that intention
comport with the economic reality of creating a debtor-creditor
relationship". Litton Bus. Sys. Inc. v. Commissioner, 61 T.C.
367, 377 (1973). This is a factual issue, to be decided upon all
the facts and circumstances in each case. Geftman v.
Commissioner, supra. Petitioners must prove that a bona fide
debt was created and that the transfers were loans. Rule 142(a);
Welch v. Helvering, supra.
Both Brian and Wayne testified that it was their intention
to obtain Plan loans. Such testimony is, however, overcome by
other evidence and is therefore not controlling. See Livernois
Trust v. Commissioner, supra. We now turn to the objective
factors relevant to the instant case.
a. The Existence or Nonexistence of a Debt Instrument
The existence of a promissory note for each transfer of
funds is evidence of debt. However, respondent argues that the
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