Nariman Teymourian - Page 13

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               2.  Petitioner Paid $48,344.76 in Interest                             
               The payment of interest indicates the existence of a loan.             
          Crowley v. Commissioner, 962 F.2d 1077 (1st Cir. 1992), affg.               
          T.C. Memo. 1990-636; see also Roschuni v. Commissioner, supra at            
          1201-1202; Jones v. Commissioner, supra.                                    
               At trial, Mr. Rolling testified that an interest rate of 6.2           
          percent was charged.  On the other hand, petitioner testified               
          that he was uncertain as to the percentage, but he believed the             
          An interest rate was prime plus one.  Respondent argues that the            
          contradictory testimony of Mr. Rolling and petitioner casts doubt           
          on whether interest was charged.  However, petitioner, Mr.                  
          Rolling, and Mr. Morrison all credibly testified that they knew             
          interest was being charged.  In addition, petitioner paid                   
          $48,344.76 in interest on December 29, 2000.  While there may               
          have been some confusion as to the rate of interest, the stated             
          intent of the parties and the actual payment of interest weighs             
          in favor of finding a loan.                                                 
               3.  There Was No Fixed Schedule for Repayment                          
               The lack of a fixed schedule for repayment is indicative of            
          a constructive dividend.  See Crowley v. Commissioner, supra;               
          Roschuni v. Commissioner, supra at 1201; Jones v. Commissioner,             
          supra.  Petitioner testified at trial that there was no fixed               
          schedule for repayment.  This factor weighs in favor of finding a           
          constructive dividend.                                                      

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