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account, the taxpayer had not made a gift at the time of
contribution.
In Shepherd v. Commissioner, 115 T.C. 376, 379-381 (2000),
the taxpayer transferred real property and stock to a newly
formed family partnership in which he was a 50-percent owner and
his two sons were each 25-percent owners. Rather than allocating
contributions to the capital account of the contributing partner,
the partnership agreement provided that any contributions would
be allocated pro rata to the capital accounts of each partner
according to ownership. Because the contributions were reflected
partially in the capital accounts of the noncontributing
partners, the value of the noncontributing partners’ interests
was enhanced by the contributions of the taxpayer. Therefore,
the Court held that the transfers to the partnership were
indirect gifts by the taxpayer to his sons of undivided
25-percent interests in the real property and stock. See id. at
389.
The contributions of property in the case at hand are
similar to the contributions in Estate of Strangi and are
distinguishable from the gifts in Shepherd. Decedent contributed
property to the partnerships and received continuing limited
partnership interests in return. All of the contributions of
property were properly reflected in the capital accounts of
decedent, and the value of the other partners’ interests was not
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