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Petitioners contend that, because the Summit Trust loan was
a bona fide loan, the transfers from PK Ventures to the Zephyr
purchasers were also bona fide loans. Petitioners are
essentially relying on the circumstances surrounding the Summit
Trust loan to establish that the transfers from PK Ventures to
the Zephyr purchasers were bona fide loans. Petitioners do not
cite any authority to support this contention. After considering
the relevant factors and weighing the evidence, we reject
petitioners’ contention that the transfers from PK Ventures to
the Zephyr purchasers were bona fide loans for the reasons
discussed below.
First, PK Ventures did not receive promissory notes from the
Zephyr purchasers in exchange for its transfer of $1 million to
them.
Second, no evidence indicates that the Zephyr purchasers
made any agreement with PK Ventures as to the time of repayment
or the interest to be paid.
Third, while PK Ventures provided security for its repayment
of the Summit Trust loan to Summit Trust, no evidence indicates
that the Zephyr purchasers provided any collateral or security
for repayment of the transfers that they received from
PK Ventures.
Fourth, the Zephyr purchasers did not make any payments of
principal or interest to PK Ventures, and no accrued interest
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