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January 30, 2000. In that return, petitioner did not include the
$1.5 million at issue in gross income.
Respondent issued a notice of deficiency (notice) to peti-
tioner with respect to the year at issue. In the notice, respon-
dent determined that petitioner is required to include the $1.5
million at issue in gross income for that year.
OPINION
Although respondent must have commenced respondent’s exami-
nation of petitioner’s return for the year at issue after July
22, 1998, the parties do not address section 7491(a).16 In any
event, we need not decide whether the burden of proof shifts to
respondent under that section. That is because resolution of the
issue presented here does not depend on who has the burden of
proof.
The parties’ sole dispute is whether the $1.5 million at
issue constitutes a loan that is includable in petitioner’s gross
income for the year at issue.
The determination of whether a transfer of funds constitutes
a loan is a question of fact. Haber v. Commissioner, 52 T.C.
255, 266 (1969), affd. per curiam 422 F.2d 198 (5th Cir. 1970).
In order for a transfer of funds to constitute a loan, at the
time the funds are transferred there must be an unconditional
16All section references are to the Internal Revenue Code in
effect for the year at issue.
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