Gerald L. and Erma L. Dunnegan - Page 8

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          nature of transfers of funds to closely held corporations, as               
          follows:  (1) The names given to the documents that would be                
          evidence of the purported loans; (2) the presence or absence of             
          fixed maturity dates with regard to the purported loans; (3) the            
          likely source of any repayments; (4) whether the taxpayers could            
          or would enforce repayment of the transfers; (5) whether the                
          taxpayers participated in the management of the corporations as a           
          result of the transfers; (6) whether the taxpayers subordinated             
          their purported loans to the loans of the corporations’                     
          creditors; (7) the intent of the taxpayers and the corporations;            
          (8) whether the taxpayers who are claiming creditor status were             
          also shareholders of the corporations; (9) the capitalization of            
          the corporations; (10) the ability of the corporations to obtain            
          financing from outside sources at the time of the transfers;                
          (11) how the funds transferred were used by the corporations;               
          (12) the failure of the corporations to repay; and (13) the risk            
          involved in making the transfers.  Calumet Indus., Inc. v.                  
          Commissioner, 95 T.C. 257, 285 (1990); Dixie Dairies Corp. v.               
          Commissioner, supra at 493.                                                 
               The above factors serve only as aids in evaluating whether             
          taxpayers’ transfers of funds to a closely held corporation                 
          should be regarded as risk capital subject to the financial                 
          success of the corporation or as bona fide loans made to the                
          corporation.  Fin Hay Realty Co. v. United States, 398 F.2d 694,            

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