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1954). The cases cited by respondent are clearly
distinguishable. In Zimmerman v. United States, supra, the
taxpayers had advanced funds to a newly formed medical society.
The funds were advanced until such time as the organization was
financially stable and could repay a portion of the advance to
the taxpayer without jeopardizing its existence. Given that
there was no evidence that the contingencies (financial stability
and ability to repay without jeopardy to the organization) ever
occurred, the Court of Appeals for the Ninth Circuit held that no
bona fide debt existed. In Ewing v. Commissioner, supra, the
taxpayer advanced sums to a ballet company. The company's
obligation to repay was expressly contingent on its having
operating profits. Citing Clark v. Commissioner, 18 T.C. 780
(1952), affd. per curiam 205 F.2d 353 (2d Cir. 1953), this Court
noted that a debt does not arise where the obligation to repay is
subject to a contingency that has not occurred, and as the
contingency (operating profits) had not occurred, we found that
no debt was created. See Ewing v. Commissioner, supra at 229.
In the present case, there were no express or implicit
agreements between the parties that repayment was contingent upon
the financial success of the Theratech device. Both petitioner
and Estes testified that Estes was obligated to repay the sums
advanced. Furthermore, petitioner recovered as much of the debt
as possible. Therefore, we conclude that petitioner's intentions
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