- 8 - payments, (4) the right to enforce payments, (5) participation in management as a result of the advances, (6) the status of the advances in relation to regular corporate creditors, (7) the ratio of debt to capital of the corporation, (8) the ability of the corporation to obtain credit from outside sources, (9) the use to which the advances were put, (10) the failure of the debtor to repay, and (11) the risk involved in making the advances. See Roth Steel Tube Co. v. Commissioner, 800 F.2d 625, 630 (6th Cir. 1986); Calumet Indus., Inc. v. Commissioner, supra; Dixie Dairies Corp. v. Commissioner, 74 T.C. 476, 493 (1980). No single factor is determinative, and not all factors are applicable in each case. See Dixie Dairies Corp. v. Commissioner, supra. "The various factors * * * are only aids in answering the ultimate question whether the investment, analyzed in terms of its economic reality, constitutes risk capital entirely subject to the fortunes of the corporate venture or represents a strict debtor-creditor relationship." Fin Hay Realty Co. v. United States, 398 F.2d 694, 697 (3d Cir. 1968). We consider each of the suggested factors in our analysis of whether petitioners created bona fide debt rather than equity, as determined by respondent. 1. Name Given Instruments Evidencing Indebtedness The issuance of a note may be indicative of bona fide debt. See Estate of Mixon v. Commissioner, 464 F.2d 394, 402 (5th Cir.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
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