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(1) the names given to the certificates
evidencing the indebtedness; (2) the presence or
absence of a fixed maturity date; (3) the source
of payments; (4) the right to enforce payment of
principal and interest; (5) participation in
management flowing as a result; (6) the status of
the contribution in relation to regular corporate
creditors; (7) the intent of the parties; (8)
"thin" or adequate capitalization; (9) identity
of interest between creditor and stockholder;
(10) source of interest payments; (11) the
ability of the corporation to obtain loans from
outside lending institutions; (12) the extent to
which the advance was used to acquire capital
assets; and (13) the failure of the debtor to
repay on the due date or to seek a postponement.
See also Stinnett's Pontiac Serv., Inc. v. Commissioner,
730 F.2d 634 (11th Cir. 1984), affg. T.C. Memo. 1982-314,
applying the same 13 factors.
Some of the above factors support respondent's
position that the advances are equity. For example, there
was no fixed maturity date for repayment of the advances,
and the only realistic source of repayment was from gains
from the sale of partnership properties. Furthermore, it
is unlikely that either partnership could have obtained
credit on the same basis from outside sources.
Other factors support petitioners' position that the
advances are debt. For example, the partnership agreement
governing each partnership treats the unsecured advances as
indebtedness, establishes an interest rate, and gives EPIC
the right to collect payment of the advances from the
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