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Koehler’s August 31, 1994, demand promissory agreement did
not have a fixed maturity date or a repayment schedule. See
Boatner v. Commissioner, T.C. Memo. 1997-379 (wherein the notes
in question, among other things, had no fixed maturity dates or
repayment schedules), affd. without published opinion 164 F.3d
629 (9th Cir. 1998).
The record reveals that, at the time the advances of $76,705
were made, petitioner could not have had a reasonable expectation
of repayment. Koehler had been experiencing financial
difficulties since his divorce in 1987 or 1988. From at least
1992 through 1996, Koehler’s financial condition was extremely
poor and he did not have the capability to repay the advances.
Koehler testified that, if petitioner or any of his other
creditors had pressed him for payment during 1993, he would have
filed for bankruptcy. Yet from August 31 through December 30,
1994, petitioner advanced $45,000 to Koehler.26 See Fisher v.
26We essentially consider window dressing Richard Koehler’s
(Koehler) execution of the Aug. 31, 1994, demand promissory
agreement. Until Aug. 31, 1994, no note existed evidencing and
covering the earlier $31,705 that petitioner advanced Koehler,
possibly as far back as the 1980s. The record further does not
reflect whether Koehler paid petitioner any “interest” with
respect to the $31,705 in advances before Aug. 31, 1994.
Similarly, we also consider window dressing Koehler’s monthly
“interest” payments totaling $4,555 to petitioner from Aug. 31,
1994, through Dec. 1, 1995. That $4,555 represented less than
one of the nine $5,000 semimonthly payments that petitioner made
to Koehler from Aug. 31 through Dec. 30, 1994.
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