- 11 - (5th Cir. 1974); Haber v. Commissioner, 52 T.C. 255, 266 (1969), affd. 422 F.2d 198 (5th Cir. 1970). The unexplained inconsistencies in not reporting the outstanding loans as due from petitioners on the corporate tax returns and on the bankruptcy schedules filed by Mayflower and by Jordan contradict the formality of the notes. There is no evidence that there was ever any effort to repay the advances, and no payments in fact were made. There is no indication that petitioners had the ability to repay the advances, and the evidence and petitioners’ arguments suggest that in fact they did not have the ability to repay the advances. We conclude on the evidence presented that the advances were taxable distributions to petitioners rather than bona fide loans. Fishing Activities The first of respondent’s alternative grounds for disallowing deductions claimed in relation to the fishing activities operated through the S corporations Billfish and Texas Terrors is the absence of the requisite profit objective within the meaning of section 183. A determination of whether the requisite profit objective exists is made on the basis of all of the surrounding facts and circumstances. See sec. 1.183-2(b), Income Tax Regs. Greater weight is given to the objective facts than to the taxpayer’s mere statement of his intent. See sec. 1.183-2(a), Income Tax Regs.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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