Nariman Teymourian - Page 16

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          loan.  Morrison v. Commissioner, T.C. Memo. 2005-53; see Welch v.           
          Commissioner, supra at 1230; Baird v. Commissioner, 25 T.C. 387,            
          395 (1955).                                                                 
               Petitioner credibly testified that, at the time the                    
          disbursements were made, he intended the disbursements to be                
          loans, he believed that interest would be charged, and he                   
          understood that he would have to repay the amounts disbursed.               
          During 2000, petitioner paid $48,344.76 in interest and repaid              
          $400,000 of the disbursements.                                              
               Mr. Morrison, the minority shareholder of Caspian, credibly            
          testified that he understood the amounts disbursed to petitioner            
          were loans, and he expected petitioner to repay the loans                   
          together with interest.                                                     
               In addition, Caspian reported petitioner’s $48,344.76                  
          payment as interest income on its 2000 income tax return.                   
          Caspian treated the disbursements to petitioner as notes                    
          receivable, indicating Caspian’s expectation that the amounts               
          would be repaid.                                                            
               The behavior of the parties weighs heavily in favor of                 
          finding a loan.                                                             
               While three of the seven factors weigh in favor of finding a           
          constructive dividend, we find those factors to be less                     
          persuasive in the present case.  In transactions between                    

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