-30-
independent lender, see Scriptomatic, Inc. v. United States,
555 F.2d 364 (3d Cir. 1977). The more a transfer appears to
result from an arm’s-length transaction, the more likely the
transfer will be considered debt. See Bayer Corp. v. Mascotech,
Inc. (In re Autosytle Plastics, Inc.), 269 F.3d 726, 750 (6th
Cir. 2001). The subjective intent of the parties to a transfer
that the transfer create debt does not override an objectively
indicated intent to the contrary. See Stinnett’s Pontiac Serv.,
Inc. v. Commissioner, 730 F.2d 634, 639 (11th Cir. 1984), affg.
T.C. Memo. 1982-314.
In the case of transfers from shareholders to their
corporations, courts generally refer to numerous factors to
determine whether the transfers create debt. Petitioners argue
that such an approach is irrelevant where, as here, a transfer is
made to a partnership rather than a corporation. Petitioners
assert that the Court in a case such as this must focus solely on
the form of the document connected with the transfer (here, the
ALSL note) and decide whether that document establishes a debtor-
creditor relationship under applicable State law. We disagree.
Petitioners have cited no authority to support their view, and we
believe that the relevant factors distinguishing debt from equity
are most helpful to us in deciding whether HEI transferred the
disputed funds to ALSL in an arm’s-length transaction made with a
genuine intention to create a debt. See Berthold v.
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