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Unlike the decedent in Estate of Harper and other cases
factually similar to that case, the record in the instant cases
establishes that Mr. Stone and Ms. Stone did substantially more
than “change the form in which he [and she] held his [and her]
beneficial interest in the contributed property.” Estate of
Harper v. Commissioner, T.C. Memo. 2002-121. The record in the
instant cases shows that the Five Partnerships had economic
substance and operated as joint enterprises for profit through
which the children actively participated in the management and
development of the respective assets of such partnerships during
their parents’ lives (and thereafter). When the partners of
ES3LP formed and funded that partnership, they contemplated and
intended that ES3LP operate as a joint enterprise for profit for
the management of its assets and that the children contribute
their services in providing such management. After ES3LP was
funded in April 1997, the children actively managed the assets of
that partnership, as Mr. Stone and Ms. Stone intended. When the
partners of ES4LP formed and funded that partnership, they con-
templated and intended that ES4LP operate as a joint enterprise
for profit for the management of its assets and that Eugene Earle
Stone, IV, contribute his services in providing such management.
After the funding of ES4LP in April 1997, Eugene Earle Stone, IV,
began actively managing the assets of ES4LP, as Mr. Stone and Ms.
Stone intended. When the partners of CRSLP formed and funded
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