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simply to maintain its construction operations. Petitioner
contends that the advances were not used to acquire capital
assets; however, before its venture into the construction
business, UPE did not possess the equipment that it needed to
perform its construction obligations under the Formosa contracts.
UPE, at its inception, used some of petitioner’s advances to
acquire capital assets at the startup of UPE. See Plantation
Patterns, Inc. v. Commissioner, 462 F.2d 712, 722 (5th Cir.
1972), affg. T.C. Memo. 1970-182. “Providing the bulk of the
necessary first assets without which a corporation could not
begin functioning is as traditional a usage of capital
contributions as is purchasing ‘capital assets’.” Slappey Drive
Indus. Park v. United States, 561 F.2d 572 (5th Cir. 1977).
In an attempt to show that the advances were bona fide
indebtedness, petitioner, at trial, offered 24 separate
promissory notes reflecting interest and maturity dates. The
promissory notes petitioner relied on were prepared for purposes
of trial in an attempt to show the type of notes that were
allegedly executed at the time of the advances. Stewart
testified that original notes were prepared at the time of the
advances, but that, alternatively they were lost, or could not be
located or may have been destroyed in a 1991 UPE office fire.
Although he signed all 24 of the reconstructed notes offered at
trial, Stewart could not remember the circumstances under which
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