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Commissioner, 812 F.2d 650, 654 (11th Cir. 1987), affg. T.C.
Memo. 1985-159; Cordes v. Commissioner, T.C. Memo. 1994-377. A
bona fide transaction is not invalidated by the mere fact that
the arrangement of the transaction confers tax benefits upon the
taxpayer. Gyro Engg. Corp. v. United States, 417 F.2d 437, 440
(9th Cir. 1969).
The Court of Appeals for the Ninth Circuit has identified
some objective factors to consider in determining whether bona
fide debt exists: (1) The names given to the certificates
evidencing the indebtedness; (2) the presence or absence of a
maturity date; (3) the source of the payments; (4) the right to
enforce payment of principal and interest; (5) participation in
management; (6) a status equal to or inferior to that of regular
corporate creditors; (7) the intent of the parties; (8) "thin" or
adequate capitalization; (9) identity of interest between
creditor and stockholder; (10) payment of interest only out of
"dividend" money; and (11) the ability of the corporation to
obtain loans from outside lending institutions. Hardman v.
United States, 827 F.2d 1409, 1412-1414 (9th Cir. 1987).
Each factor is not necessarily afforded equal significance
nor is any particular factor determinative. Dixie Dairies Corp.
v. Commissioner, 74 T.C. 476, 493-494 (1980). Not all of the
factors articulated by the Ninth Circuit are relevant in each
case. Id. The ultimate question is whether there was a “genuine
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