- 96 -
be repaid in full. See, e.g., Siegel v. Commissioner,
supra at 688. In the case of nonrecourse indebtedness,
such as that involved in the instant cases, the
indebtedness is a lien that the debtor must satisfy
according to its terms in order to retain possession and
use of the encumbered property, but there is no fixed,
unconditional obligation of the debtor to pay. See, e.g.,
Waddell v. Commissioner, 86 T.C. 848, 898 (1986), affd. 841
F.2d 264 (9th Cir. 1988). However, the lack of personal
liability of the debtor, by itself, does not mean that
nonrecourse indebtedness will not be repaid, nor does it
disqualify the nonrecourse indebtedness from being
considered genuine. See, e.g., Hager v. Commissioner,
supra at 773; Mayerson v. Commissioner, 47 T.C. 340, 351-
352 (1966). A nonrecourse mortgage can be found to be
genuine indebtedness for tax purposes "on the assumption
that the mortgage will be repaid in full." Commissioner v.
Tufts, 461 U.S. 300, 308 (1983).
We have previously summarized the approaches taken by
the courts in determining whether a purported nonrecourse
liability is to be treated as true debt for Federal tax
purposes. See, e.g., Waddell v. Commissioner, supra at
900-902; Fox v. Commissioner, supra at 1019-1021. In Fox
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