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and had the transfers recorded in Border’s books, it is clear
that petitioner and Mr. Tedford would not have demanded payment
if it would have imperiled the financial condition of Border;
therefore, repayment was dependent upon the fortunes of Border’s
business and was indicative of a capital investment.
This factor favors respondent’s position.
D. The Right To Enforce Repayment
An essential element in determining whether a taxpayer
intended to enforce repayment of the advance is whether a good-
faith intent on the part of the recipient of the funds to make
repayment and good-faith intent on the part of the taxpayer to
enforce repayment exists. See Fisher v. Commissioner, 54 T.C.
905, 909-910 (1970). We must also consider whether, under the
facts and circumstances of this case, there was a reasonable
expectation of repayment in light of the economic realities of
the situation. See Provost v. Commissioner, T.C. Memo. 2000-177.
We are not convinced petitioner and Mr. Tedford had good-
faith intentions of enforcing repayment. The testimony clearly
indicated that petitioner and Mr. Tedford understood Border’s
financial situation and did not intend to require repayment of
the transfers unless and until Border made a profit. In
addition, petitioner and Mr. Tedford’s continued lending of
additional funds refutes the existence of a valid debtor-creditor
relationship between Border, and Mr. Tedford and petitioner with
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