- 10 -
1993); Estate of Kelley v. Commissioner, 63 T.C. 321, 323-324
(1974); Rude v. Commissioner, 48 T.C. 165, 173 (1967); Clark v.
Commissioner, 18 T.C. 780, 783 (1952), affd. per curiam 205 F.2d
353 (2d Cir. 1953); Bragg v. Commissioner, supra. The factors
are not exclusive, and no one factor controls. Rather, our
evaluation of the various factors provides us with an evidential
basis upon which we make our ultimate factual determination of
whether a bona fide indebtedness existed. See Litton Bus. Sys.,
Inc. v. Commissioner, 61 T.C. 367, 377 (1973).
With those factors in mind, we turn to the facts and
circumstances surrounding the transfers of Price Co. stock at
issue to determine whether at the time of the alleged loans
petitioners entered into a bona fide debtor-creditor relationship
with Drachman.
1. Promissory Note or Other Evidence of Indebtedness
Petitioners introduced what appear to be, in form, two valid
loan documents signed by petitioner and Drachman. We must,
however, look to the substance of the transaction rather than
merely its form. Estate of Maxwell v. Commissioner, supra at
601. Petitioner testified that these notes had no amortization
schedule, no minimum payment, and were due "only when I call it"
(emphasis added). Accordingly, petitioners had no set schedule
of regular payments and no minimum payments. These are not
standard conditions for loan documents.
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