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Accordingly, the final regulation is not applicable to the case
at bar.
Before the promulgation of the final regulation, a proposed
regulation had been issued containing these same provisions.
Sec. 1.72(p)-1, Q & A-4, Q & A-10, Proposed Income Tax Regs., 60
Fed. Reg. 66235, 66236 (Dec. 21, 1995). The proposed regulation,
however, was to apply only to loans made after a certain period
after the final regulation had been published. Sec. 1.72(p)-1, Q
& A-19, Proposed Income Tax Regs., 60 Fed. Reg. 66237 (Dec. 21,
1995). Generally, proposed regulations are afforded no more
weight than a position advanced by the Commissioner on brief.
KTA-Tator, Inc. v. Commissioner, 108 T.C. 100, 102-103 (1997);
F.W. Woolworth Co. v. Commissioner, 54 T.C. 1233, 1265-1266
(1970).
Nevertheless, we find that respondent’s position in the
proposed regulation makes more sense than respondent’s litigating
position that the distribution occurred in 2000. See Garcia v.
Commissioner, T.C. Memo. 1998-203 (reaching this conclusion
regarding another question and answer contained in the same
proposed regulation), affd. without published opinion 190 F.3d
538 (5th Cir. 1999). Additionally, the substantially level
amortization requirement under section 72(p)(2)(C) has been
interpreted as requiring that payment of principal and interest
be made in substantially level amounts over the term of the loan.
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