- 7 -
to be determined upon consideration of all the facts. Fisher v.
Commissioner, 54 T.C. 905, 909 (1970).
For a payment to constitute a loan, at the time the payments
are received, the recipient must intend to repay the amounts and
the transferor must intend to enforce payment. Haag v.
Commissioner, 88 T.C. 604, 615 (1987), affd. without published
opinion 855 F.2d 855 (8th Cir. 1988); Beaver v. Commissioner, 55
T.C. 85, 91 (1970). Further, the obligation to repay must be
unconditional and not contingent on a future event. United
States v. Henderson, 375 F.2d 36, 39 (5th Cir. 1967); Bouchard v.
Commissioner, 229 F.2d 703 (7th Cir. 1956), affg. T.C. Memo.
1954-243; Haag v. Commissioner, supra at 615.
Intent is a state of mind rarely susceptible of proof by
direct evidence; therefore, we have generally considered a number
of criteria for the purpose of determining the intent of the
parties at the time the payments were made. Dean v.
Commissioner, 57 T.C. 32, 43 (1971). No single factor, standing
alone, is controlling, but each factor is considered with all the
facts and circumstances present. Id. at 44.
On the basis of the evidence in the record, we find that the
guarantee payments advanced to petitioner constituted a loan and
are not taxable income.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011