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1997, Mr. Stone transferred to ES4LP some of his preferred stock
of Stones, Inc., his interest in the Keith Drive property, and
certain other property, and Eugene Earle Stone, IV, transferred
to ES4LP his interest in the Keith Drive property, in exchange
for both general and limited partnership interests.30 At a time
not disclosed by the record in April 1997, Anne M. Stone trans-
ferred certain property that she owned to ES4LP in exchange for a
general partnership interest. On April 15, 1997, Ms. Stone
transferred certain property that she owned to ES4LP in exchange
for a limited partnership interest. When the partners of ES4LP
formed and funded that partnership, they contemplated and in-
tended 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 partners of ES4LP transferred the respective
assets that they owned to ES4LP in exchange for certain partner-
ship interests, Eugene Earle Stone, IV, began actively managing
the assets of ES4LP, as Mr. and Ms. Stone intended. In this
connection, Eugene Earle Stone, IV, on behalf of ES4LP,
managed, and made investment decisions with respect to, ES4LP’s
assets. The respective partnership returns that ES4LP filed for
30Although not altogether clear from the record, it appears
that Eugene Earle Stone, IV, also transferred certain other
property to ES4LP in exchange for general and limited partnership
interests.
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