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Problem 1: U, an individual shareholder (51% owner of X shares) of X corporation, enters into a note payable with X corporation. According to the terms of this written and executed note payable agreement, X will lend U $1 million which will be re-paid in 30 years. There is no interest charged on the loan. Under which of the following judicial doctrines would the IRS most likely attack this transaction?
a. Step Transactionb. Form over Substancec. Business Purposed. The IRS should not attack this since it is evidenced by a fully executed legal agreement.
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