Ronald B. and Annette C. Talmage - Page 63




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         Therefore, petitioner’s transfer of the Rivercliff property to RFI           
         in June 30, 2005, was not a bona fide repayment.  See Commissioner           
         v. Makransky, supra at 600-601.                                              
              This factor indicates the parties did not intend to establish           
         a debtor-creditor relationship at the time the funds were                    
         advanced.                                                                    
                   7.   Whether the Parties Conducted Themselves As If the            
                        Transaction Were a Loan                                       
              The conduct of the parties may indicate the existence of a              
         loan.  Baird v. Commissioner, 25 T.C. 387, 395 (1955); Teymourian            
         v. Commissioner, T.C. Memo. 2005-232; Morrison v. Commissioner,              
         supra.                                                                       
              Petitioner produced no evidence showing TPPL and petitioner             
         conducted themselves in a manner indicating that TPPL’s transfer             
         of $249,143 to SSI in 1998 was a loan.  Petitioner also failed to            
         produce evidence showing NCPL and petitioner conducted themselves            
         in a manner indicating the total of $92,250 NCPL transferred to              
         petitioner for the Rivercliff property’s farm operating expenses             
         in 1998, 2001, and 2002 was a loan.                                          
              Although petitioner executed a loan agreement, a promissory             
         note, and a trust deed indicating the funds transferred to SSI for           
         the development of the Rivercliff property in 1999, 2000, and 2001           
         were a loan, neither party abided by the terms of the loan                   
         agreement, the promissory note, or the trust deed.                           








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