-60-
interest payments for the use of the funds may not be a bona fide
lender. See Stinnett’s Pontiac Serv., Inc. v. Commissioner,
supra at 640. We also note that decedent during her lifetime
never paid any interest (or principal) to the LRFLP for the use
of its funds.
This factor weighs toward a finding that decedent’s use of
the funds of the LRFLP did not create bona fide debt.
iv. Source of Repayment
Repayment that depends solely upon the success of the
transferee’s business weighs against a finding of bona fide debt.
Repayment that does not depend on earnings weighs toward a
finding of debt. See Roth Steel Tube Co. v. Commissioner, supra
at 632; Lane v. United States, 742 F.2d 1311, 1314 (11th Cir.
1984). “An expectation of repayment solely from * * * earnings
is not indicative of bona fide debt regardless of its
reasonableness.” Roth Steel Tube Co. v. Commissioner, supra at
631; see also Stinnett’s Pontiac Serv., Inc. v. Commissioner,
supra at 638-639; Segel v. Commissioner, 89 T.C. 816, 830 (1987);
Deja Vu, Inc. v. Commissioner, T.C. Memo. 1996-234.
The funds of the LRFLP were used to benefit decedent with no
expectation of repayment from her during her lifetime. In
addition, as to the possibility of repayment, the funds were
placed at the risk of the business of the LRFLP in that
decedent’s ability to repay them depended primarily (if not
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