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(3) the financing arrangements into which Rose had entered in
connection with his acquisition of control of PK Ventures during
1990; and (4) the financing arrangements between PKVI LP and
unrelated parties.
Tenth, although some of the labels used to describe the
transfers from PK Ventures to PKVI LP on these businesses’ books
classified the transfers as debt, these labels cannot overcome
the substance of these transfers. See Estate of Mixon v. United
States, 464 F.2d at 403-404; cf. Gregory v. Helvering, 293 U.S.
at 468-470. Based upon our analysis of the relevant factors, we
conclude that these transfers were, in substance, contributions
of capital from PK Ventures to PKVI LP.
Based on the foregoing, we sustain respondent’s
determination that PKVI LP should not have deducted $100,661 of
interest expense on its Form 1065 for 1991 with respect to these
transfers. The parties agree, and the Court is persuaded, that
we do not have jurisdiction over the adjustments made in the
notice of deficiency sent to PKV&S with respect to imputed
interest income reported on Forms 1120 for 1990 and 1991 and a
bad debt deduction claimed on Form 1120 for 1991.
Issue #3--Transfers From PK Ventures, TBPC, and TPTC to Zephyr
The characterization of transfers from PK Ventures and its
subsidiaries to Zephyr is relevant only to the bad debt
deductions claimed by PKV&S and disallowed in the notice of
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