-54-
unconditional, and legally enforceable obligation to repay, see
Frierdich v. Commissioner, supra at 185; Hubert Enters., Inc. &
Subs. v. Commissioner, 125 T.C. 72, 91 (2005), and transfers
between related parties are examined with special scrutiny, see
Tulia Feedlot, Inc. v. United States, 513 F.2d 800, 805 (5th Cir.
1975); Haber v. Commissioner, 52 T.C. 255, 266 (1969), affd.
422 F.2d 198 (5th Cir. 1970). A transfer’s economic substance
prevails over its form, see Byerlite Corp. v. Williams, 286 F.2d
285, 291 (6th Cir. 1960), and a finding of economic substance
turns on whether the transfer would have followed the same form
had it been between the transferee and an independent lender, see
Scriptomatic, Inc. v. United States, 555 F.2d 364 (3d Cir. 1977).
The subjective intent of the parties to a transfer that the
transfer create debt does not override an objectively indicated
intent to the contrary. See Stinnett’s Pontiac Serv., Inc. v.
Commissioner, 730 F.2d 634, 639 (11th Cir. 1984), affg. T.C.
Memo. 1982-314; cf. Busch v. Commissioner, 728 F.2d 945, 948 (7th
Cir. 1984), affg. T.C. Memo. 1983-98.
Whether the withdrawal of funds from an entity by one of its
owners creates a true debtor-creditor relationship is a factual
question to be decided on the basis of all relevant facts and
circumstances. See Haag v. Commissioner, 88 T.C. 604, 615
(1987), affd. without published opinion 855 F.2d 855 (8th Cir.
1988); see also Haber v. Commissioner, supra at 266. For
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