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the cash or cash equivalent resources necessary to fund Sidal’s
losses, it did own valuable real property that could be (and was)
used on petitioners’ behalf as collateral for the bank loans.
Where the controlled entity owns assets that, in essence, belong
to the controlling shareholders or partners and can be used to
obtain loans on behalf of the controlling shareholders or
partners, we see no need to distinguish Culnen on the basis of
the liquidity of the controlled entity’s assets.
2. Sufficiency of Petitioners’ Evidence
a. The Paulan Direct Payments
(1) Introduction
We have placed a high bar before any taxpayer who would
disavow the form of a direct loan between two entities he
controls and, instead, treat the loan as back-to-back loans
through him. See, e.g., Shebester v. Commissioner, T.C. Memo.
1987-246 (the taxpayer “may not so easily disavow the form of * *
* [his] transaction”); Burnstein v. Commissioner, T.C. Memo.
1984-74 (“‘A transaction is to be given its tax effect in accord
with what actually occurred and not in accord with what might
have occurred.’” (quoting Don E. Williams Co. v. Commissioner,
429 U.S. 569, 579 (1977))). In both Shebester and Burnstein, the
taxpayer’s attempt to recast a direct loan between commonly
controlled entities as back-to-back loans through the taxpayer-
owner was unsuccessful. In Yates v. Commissioner, T.C. Memo.
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