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were not the same as those of the taxpayers in the above cases.
Accordingly, to the extent that we determine the advances in
these cases were loans, we do not find that the obligation to
repay was contingent upon the success of the Theratech device.
Instead we find that the obligation to repay the advances was
fixed; however, there was a sizable risk that Estes could not
repay the advances unless the device became a financial success.
Bona Fide Debt
A determination that the obligation to repay is not
contingent on some future event does not necessarily mean that
the loans are bona fide debts for purposes of section 166. It
must also be established by petitioners that the loans were made
with a reasonable expectation, belief, and intention that they
would be repaid. The determination of whether a transfer was
made with a real expectation of repayment and an intention to
enforce the debt depends on all the facts and circumstances
including whether: (1) There was a promissory note or other
evidence of indebtedness; (2) there is any written loan
agreement; (3) interest was charged; (4) there was security or
collateral, (5) there was a fixed maturity date; (6) a demand for
repayment was made; (7) any actual repayment was made; (8) the
transferee had the ability to repay; and (9) the parties'
records, if any, reflect the transaction as a loan. See John
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