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value”.75
On the record before us, we further find that the respective
transfers of assets by Mr. Stone and Ms. Stone to each of the
Five Partnerships were for adequate and full consideration in
money or money’s worth. We have found that such transfers were
not, and respondent does not claim that they were, gifts by Mr.
Stone and Ms. Stone, respectively, to the other partners of each
such partnership. We have also found, and respondent agrees
and/or does not dispute, that after all the partners of each of
the Five Partnerships transferred to each such partnership cer-
tain of their respective assets and after certain gifts were made
by Mr. Stone in April 1997 to correct the unintended consequences
of certain inadvertent valuation errors:76 (1) All partners of
75Although not cited by the parties in the instant cases
because they filed their respective briefs prior to the issuance
of Estate of Strangi v. Commissioner, T.C. Memo. 2003-145,
Strangi insofar as it relates to sec. 2036(a)(1) is similar to
Estate of Harper v. Commissioner, T.C. Memo. 2002-121, and is
distinguishable from the instant cases. On the facts presented,
Strangi found, as Estate of Harper did on the facts presented
there, that “there has been merely a ‘recycling’ of value through
partnership or corporate solution.” Estate of Strangi v. Commis-
sioner, supra. In so concluding, Strangi found that the arrange-
ment involved in that case “patently fails to qualify as the sort
of functioning business enterprise that could potentially inject
intangibles that would lift the situation beyond mere recycling.”
Id.
76Respondent properly does not contend that Mr. Stone’s
gifts to correct the unintended consequences of certain inadver-
tent valuation errors are factors to be considered in determining
whether the transfers at issue were bona fide sales for adequate
and full consideration in money or money’s worth under sec.
(continued...)
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