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comprise solely shareholders. We need not answer those questions
in this setting, however, because we are able to deal with the
entire loan from the corporation to the shareholder within the
statutory framework and without reference to any regulation. To
the extent that Tharp family members who were not shareholders
received some benefit from the below-market loans, they did so
only because the lender’s shareholders (who were also Tharp
family members) made the decision or choice that they so benefit.
Also, because of our holding on the ordering of the indirect
loans, any benefit received by nonshareholders would have been
received from petitioner’s shareholders.
Parts of section 7872 (other than the one addressing
corporations and shareholders) concern below-market loans in
several types of situations. None of the various section 7872
applications addressing below-market loans require that each
dollar lent benefit the intended borrower directly or fully. We
know this because the statute applies to indirect loans, and, by
definition, such loans can be to a person or entity other than
the shareholder or corporation referenced in section
7872(c)(1)(C).
Respondent, on brief, argues that “the interest-free demand
loans were made by petitioner to the borrowing entities solely to
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