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taxable income until the time the settlement agreement was
reached and he was no longer obligated to repay them. Respondent
contends that the payments were not bona fide loans to petitioner
because Winston did not intend to enforce the advances as loans.
Therefore, the payments should have been included in petitioner’s
income for the tax year 1993.10
Gross income is “construed broadly to reach any accession to
wealth realized by a taxpayer over which the taxpayer has
‘complete dominion’”. Fla. Progress Corp. v. Commissioner, 114
T.C. 587, 598 (2000) (quoting Commissioner v. Glenshaw Glass Co.,
348 U.S. 426, 431 (1955)). Generally, the proceeds of a loan do
not constitute income to the borrower because the benefit is
offset by an obligation to repay. See Arlen v. Commissioner, 48
T.C. 640, 648 (1967). Whether a bona fide debtor-creditor
relationship exists is a question of fact to be determined upon
consideration of all the pertinent facts in the case. Haber v.
Commissioner, 52 T.C. 255, 266 (1969), affd. 422 F.2d 198 (5th
Cir. 1970); Birnbaum v. Commissioner, T.C. Memo. 1993-485. For a
disbursement to constitute a loan at the time funds are
transferred, the recipient must intend to repay the proceeds and
10 Respondent maintained alternative protective positions in
the notices of deficiency by determining deficiencies
attributable to the $48,420 in the 1993 and 1994 tax years.
Petitioner did not report the amount until the 1995 year, when
the entire matter was completely settled. The parties, in their
arguments on brief, frame the ultimate question in terms of
whether the $48,420 is reportable in 1993 or 1995.
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