-56-
absence of a fixed interest rate and actual interest payments;
(4) the source of repayment; (5) the adequacy or inadequacy of
capitalization; (6) the identity of interest between creditors
and equity holders; (7) the security for repayment; (8) the
transferee’s ability to obtain financing from outside lending
institutions; (9) the extent to which repayment was subordinated
to the claims of outside creditors; (10) the extent to which
transferred funds were used to acquire capital assets; and
(11) the presence or absence of a sinking fund to provide
repayment. See Hubert Enters., Inc. & Subs. v. Commissioner,
supra at 92; Recklitis v. Commissioner, 91 T.C. 874, 901-902
(1988); cf. Stinnett’s Pontiac Serv., Inc. v. Commissioner, supra
at 638. No one factor is controlling, and courts must consider
the particular circumstances of each case. See Busch v.
Commissioner, supra at 951; Recklitis v. Commissioner, supra at
905. Each case turns on its own factors. See Slappey Drive Ind.
Park v. United States, 561 F.2d at 581; see also Busch v.
Commissioner, supra at 951.
We analyze and weigh the facts of this case in the context
of the relevant factors.
i. Name of Certificate
We look to the name of the certificate evidencing a transfer
to determine whether the parties thereto intended that the
transfer create debt. Although the issuance of a note weighs
Page: Previous 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 NextLast modified: May 25, 2011