This issue in this case is qualification of an investment as debt or equity. HP bought preferred stock in Foppingadreef Investments, a Dutch company. Foppingadreef Investments bought contingent interest notes, from which FOP’s preferred stock received dividends that HP claimed as foreign tax credits. HP claimed millions in foreign tax credits between 1997 and 2003, then exercised its option to sell its preferred shares for a capital loss of more than $16 million. The IRS characterized the transaction as debt, and denied the tax credits claimed by Hewlett Packard. First the Tax Court and later the Court of Appeal agreed with the tax authorities. The eleven factors considered by the Court when qualifying an investment as debt/equity the names given to the certificates evidencing the indebtedness; the presence or absence of a maturity date; the source of the payments; the right to enforce the payment of principal and interest; participation and management; a status equal to or inferior to that of regular corporate creditors; the intent of the parties; ‘thin’ or adequate capitalization; identity of interest between creditor and stock holder; payment of interest only out of ‘dividend’ money; the ability of the corporation to obtain loans from outside lending  institutions. “The parties expend considerable effort arguing over whether “most” of the relevant factors point one way or the other. But our test isn’t a bean-counting exercise. Instead, it’s best understood as a non-exhaustive list of circumstances that are often helpful in guiding a court’s factual determination. And, while such a free-floating inquiry is hardly a paragon of judicial predictability, it’s the necessary evil of a tax code that mistakes a messy spectrum for a simple binary, and has repeatedly failed to offer the courts statutory or regulatory guidance” “With this background in place, we have no difficulty concluding that the Tax Court didn’t err in finding that HP’s investment in FOP is best characterized as debt. While the factors point in different directions, the Tax Court committed no clear error in considering or weighing them. It appropriately found that the formal labels attached to the documents didn’t settle the inquiry. Instead, of particular importance to the Tax Court was the de facto presence of a fixed maturity date, and HP’s de facto creditor’s rights. The Tax Court concluded that the deal had a de facto maturity date because HP had an overwhelming economic incentive to divest itself of FOP after 2003: After that year, FOP would have negative earnings, thereby preventing HP from claiming foreign tax credits. HP knew this, and never expected to stay in the transaction after 2003. HP’s income was also highly predictable: It was entitled to semiannual payments equal to 97% of the after-tax base interest on the notes, and had a contractual remedy against ABN and, if ABN failed to pay interest on the notes, FOP as well. While payment of the dividends was contingent on FOP’s earnings, the transaction was arranged such that FOP’s earnings were all but predetermined. In short, HP’s investment earned it a limited return for a fixed period, and the Tax Court made no error in concluding that the investment was debt.” The Court of Appeal also upheld the determination that a purported capital loss was really a fee paid for a tax shelter, which cannot be deducted ...