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1963), affg. T.C. Memo. 1962-10. Transfers of funds to a closely
held corporation by its sole shareholder are however, subject to
heightened scrutiny, and labels attached to these transfers
through bookkeeping entries or testimony have limited
significance unless the labels are supported by objective
evidence. Fin Hay Realty Co. v. United States, supra at 697;
Dixie Dairies Corp. v. Commissioner, supra at 495.
Mr. Tedford also indicated what transferred funds were to be
included in the claimed loans by writing “loan” on selected
checks. In addition, the transfers were listed as loans to
shareholders in Border’s records and were included as an asset on
a personal financial statement for petitioner and Mr. Tedford.
To the limited extent that this factor indicates bona fide
debt, this factor favors petitioner’s position. We, however,
find other factors overriding.
B. Presence or Absence of Fixed Maturity Date
“The presence of a fixed maturity date indicates a fixed
obligation to repay, a characteristic of a debt obligation. The
absence of the same on the other hand would indicate that
repayment was in some way tied to the fortunes of the business,
indicative of an equity advance.” Estate of Mixon v. United
States, 464 F.2d 394, 404 (5th Cir. 1972); see also Am. Offshore,
Inc. v. Commissioner, supra at 602.
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