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indicates the existence of a bona fide loan. Welch v.
Commissioner, supra at 1231. A bona fide loan is not indicated
when a taxpayer is financially unable to repay advanced funds at
the time they are given. Estate of Taschler v. United States, 440
F.2d 72, 76 (3d Cir. 1971); Commissioner v. Makransky, 321 F.2d
598, 600 (3d Cir. 1963), affg. 36 T.C. 446 (1961).
During 1998, 1999, 2000, 2001, and 2002, petitioner, directly
or indirectly through SSI, was advanced $6,194,036 for the
purchase, development, and operation of the Rivercliff property
and for family support obligations while allegedly earning only
$58,736, $76,560, $84,000, $67,850, and $75,000 in 1998, 1999,
2000, 2001, and 2002, respectively. Petitioner did not produce
any documentation indicating he had other assets, other sources of
income, or any prospective means of repaying the large sums of
money he was advanced. See Commissioner v. Makransky, supra at
600-601.
Therefore, it was unreasonable to expect at the time the
funds were advanced that he could repay them. This factor
indicates the parties did not intend to establish a
debtor-creditor relationship at the time the funds were advanced.
5. Whether Interest Was Charged
The payment of interest indicates the existence of a bona
fide loan. Welch v. Commissioner, supra at 1231; Teymourian v.
Commissioner, supra; Morrison v. Commissioner, T.C. Memo. 2005-53.
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