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The record is devoid of any evidence that interest was paid on any
of the advanced funds at any time, including when petitioner
transferred the Rivercliff property to RFI.
This factor indicates the parties did not intend to establish
a debtor-creditor relationship at the time the funds were
advanced. See Calumet Indus, Inc. v. Commissioner, 95 T.C. 257,
287 (1990).
6. Whether Repayments Were Made
Repayment is an indication that an advance was intended as a
loan. Welch v. Commissioner, supra at 1231; Pierce v.
Commissioner, 61 T.C. 424, 431 (1974); Haber v. Commissioner, 52
T.C. 255, 266 (1969), affd. 422 F.2d 198 (5th Cir. 1970).
Repayments must be bona fide. Crowley v. Commissioner, 962 F.2d
1077, 1083 (1st Cir. 1992), affg. T.C. Memo. 1990-636.
Petitioner contends that the transfer of the Rivercliff
property to RFI constituted repayment of his outstanding loans.
However, petitioner testified that he did not intend to repay the
funds wire transferred to SSI or him until the character of the
advances could be determined. He also did not have a present or
prospective means of repaying the advanced funds. The transfer of
the Rivercliff property to RFI after the notices of deficiency
were issued was directed to an effort to give the funds that had
been advanced a character which they did not have when they were
advanced. See Estate of Taschler v. United States, supra at 76.
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