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In order to show entitlement to an ordinary loss under
section 166, petitioners must establish that (1) a bona fide debt
existed between J&J and TLC which obligated TLC to pay J&J a
fixed or determinable sum of money, (2) the debt was created or
acquired in connection with a trade or business of J&J, and (3)
the debt became worthless when claimed. See United States v.
Generes, 405 U.S. 93 (1972); Calumet Indus., Inc. v.
Commissioner, 95 T.C. 257, 285 (1990); Beaver v. Commissioner, 55
T.C. 85, 91 (1970); Black v. Commissioner, 52 T.C. 147, 151
(1969). A gift or contribution to capital is not debt within the
meaning of section 166. See Calumet Indus., Inc. v.
Commissioner, supra at 284; Kean v. Commissioner, 91 T.C. 575,
594 (1988).
Accordingly, petitioners must show that there was "a genuine
intention to create a debt, with a reasonable expectation of
repayment" and that the intention was consistent with the
"economic reality of creating a debtor-creditor relationship".
Litton Bus. Sys., Inc. v. Commissioner, 61 T.C. 367, 377 (1973).
Whether the requisite intention to create a true debtor-creditor
relationship existed is a question of fact to be determined from
a review of all the evidence. See id. Factors that have been
considered in the analysis of this issue include (1) the names
given to the certificates evidencing the indebtedness, (2) the
presence or absence of a fixed maturity date, (3) the source of
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