CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 15

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          of $1.257 million during 1997.  Cap Corp. also owed approximately           
          $2.5 million on outstanding notes issued to third-party                     
          creditors.  With respect to the $2.5 million, Cap Corp. was                 
          obligated to make interest payments and pay off the note                    
          principal during December 1997 or December 1998.  See Cuyuna                
          Realty Co. v. Commissioner, 382 F.2d at 302 (noting that although           
          the taxpayer-parent’s later concession that some of its purported           
          loans to its subsidiary were equity might significantly improve             
          the debt-to-equity ratio of its subsidiary, the subsidiary still            
          would lack a sufficient earnings base to carry the remaining                
          outstanding indebtedness).                                                  
               This factor favors respondent.                                         
          9.  Identity of Interest                                                    
               Advances made by a sole shareholder are more likely to be              
          committed to the risk of the business than are advances made by             
          creditors who are not shareholders.  Ga. Pac. Corp. v.                      
          Commissioner, 63 T.C. 790, 797 (1975).  The sole shareholder is             
          also less likely to be concerned than a third party would be with           
          the safeguards normally used to protect such advances.  Id.                 
               At all times relevant, Crispin and Koehler were Cap Corp.’s            
          only shareholders.  Petitioner itself held no formal stock                  
          interest in Cap Corp.  However, Crispin was CMA’s 98-percent                
          shareholder and ultimate decision maker.                                    








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