Douglas Bynum, Jr. and Shirley A. Bynum - Page 4




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          Calumet Indus., Inc. v. Commissioner, supra at 285-286 (quoting             
          Fin Hay Realty Co. v. United States, 398 F.2d 694, 697 (3d Cir.             
          1968)).  The names given to documents evidencing the                        
          indebtedness, the presence or absence of a fixed maturity date,             
          the source of repayments, the right to enforce repayment of the             
          advance, the intent of the parties, the failure of the                      
          corporation to repay on the due date, and other factors are                 
          considered to determine whether a payment is a contribution to              
          capital or bona fide debt.  See Tex. Farm Bureau v. United                  
          States, 725 F.2d 307 (5th Cir. 1984); Am. Offshore, Inc. v.                 
          Commissioner, 97 T.C. 579, 602-606 (1991).  No one factor is                
          controlling, and the determination of whether there is a loan or            
          a contribution to capital is a question of fact which must be               
          decided on the basis of all the relevant facts and circumstances.           
          Calumet Indus., Inc. v. Commissioner, supra at 285.                         
               The expenses paid on behalf of SEI were not bona fide                  
          loans.2  Mr. Bynum and SEI did not have a debtor-creditor                   
          relationship.  Mr. Bynum certainly paid and substantiated a wide            
          array of business expenses, but these payments were not loans to            


               2 Pursuant to sec. 7491(a), petitioners have the burden of             
          proof unless they introduce credible evidence relating to the               
          issue that would shift the burden to respondent.  See Rule                  
          142(a).  Our conclusions, however, are based on a preponderance             
          of the evidence, and thus the allocation of the burden of proof             
          is immaterial.  See Martin Ice Cream Co. v. Commissioner, 110               
          T.C. 189, 210 n.16 (1998).                                                  







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