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contributions to capital. The factors considered relevant for
purposes of identifying bona fide loans include (1) the existence
or nonexistence of a debt instrument; (2) provisions for
security, interest payments, and a fixed payment date;
(3) treatment of the funds on the corporation’s books;
(4) whether repayments were made; (5) the extent of the
shareholder’s participation in management; and (6) the effect of
the “loan” on the shareholder/employee’s salary. Haber v.
Commissioner, supra at 266; see also In re Indian Lake Estates,
Inc., 448 F.2d 574, 578-579 (5th Cir. 1971); Haag v.
Commissioner, supra at 616-617 & n.6. When the individuals are
in substantial control of the corporation, as petitioners were in
these cases, such control invites a special scrutiny of the
situation. Haber v. Commissioner, supra at 266; Roschuni v.
Commissioner, supra at 1202. For the reasons set forth below, we
conclude that the facts of record do not support the Gownis’
attempt to characterize the distributions that they received from
Mina of Forest City and Bishoy in 1999 as repayments of bona fide
loans.
First, no note or other evidence of indebtedness
representing the amount or existence of the shareholder loans was
given to the Gownis by Mina of Forest City or Bishoy.
Second, no evidence indicates that Mina of Forest City or
Bishoy provided any collateral or security for repayment of these
purported loan amounts or that the corporations made any
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