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was Mr. Merline, Mr. Stone’s attorney, who drafted proposed
partnership agreements for the Five Partnerships. Mr. Merline
discussed with Mr. Stone the children’s and their respective
attorneys’ suggested changes to those proposed agreements. Only
after Mr. Stone agreed to certain of those suggested changes did
Mr. Merline revise the proposed partnerships agreements to re-
flect the changes to which Mr. Stone agreed.
The record also establishes that the respective transfers at
issue did not constitute gifts by Mr. Stone and Ms. Stone, re-
spectively, to the other partners of each of the Five Partner-
ships.73 In addition, the record shows that those transfers were
motivated primarily by investment and business concerns relating
to the management of certain of the respective assets of Mr.
Stone and Ms. Stone during their lives74 and thereafter and the
resolution of the litigation among the children.
73Respondent properly does not contend that the respective
transfers of assets by Mr. Stone and Ms. Stone to each of the
Five Partnerships were gifts by them to the other partners of
each such partnership. See Estate of Jones v. Commissioner, 116
T.C. 121, 127-128 (2001); Estate of Michelson v. Commission, T.C.
Memo. 1978-371. In this connection, respondent asserted in the
notice issued to Mr. Stone’s estate an alternative gift theory
which respondent has since abandoned. Respondent did not assert
any alternative gift theory in the notice issued to Ms. Stone’s
estate.
74At least as early as the last six months of 1995, Mr.
Stone and Ms. Stone were in control of their respective assets.
However, they no longer were interested or actively involved in
managing those assets and wanted their children to become ac-
tively involved in the management of those assets.
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