- 26 -
F.2d 769, 774 (11th Cir. 1985)), affg. T.C. Memo. 1997-530.
However, even the Court of Appeals for the Eleventh Circuit
affirms the general principle requiring an economic outlay,
concluding merely that when the shareholder is looked to as the
primary obligor, he or she has in substance borrowed the funds
and advanced them to the corporation. Sleiman v. Commissioner,
supra at 1357; Selfe v. United States, supra at 772-773; see also
Maloof v. Commissioner, supra at 651.
It is against the foregoing backdrop that petitioners’
characterization of Mr. Gleason as the true borrower versus
respondent’s of a loan in substance to Alofs and Target must be
weighed. We observe at the outset that our task is complicated
by the parties’ choice not to include in the record the documents
or agreement by which the share exchange was accomplished, such
that we are left to glean information about the formal structure
of the transaction from tangential materials. Hence, as one
example, we do not even know whether the operative paperwork in
form framed the LBO transaction as a purchase by Mr. Gleason or a
redemption by the corporations. With such limitations in mind,
we turn to the details of the parties’ arguments.
Respondent’s position that the $6 million was in substance a
loan to Alofs and Target rests on the general premise that
Mr. Gleason made no economic outlay in connection with the
transaction because Comerica looked primarily to the S
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