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          money or money’s worth, the amount of the gift is the amount by             
          which the value of the property transferred exceeds the value of            
          the property received.  See sec. 2512(b).                                   
               Petitioners contend that they made gifts of limited                    
          partnership interests and that the partnerships have economic               
          substance and are valid under Missouri law.  Thus, they argue               
          that the partnerships may not be disregarded for Federal tax                
          purposes and that the stipulated discounts apply in determining             
          the value of the gifts.  Petitioners further contend that,                  
          because they did not shift economic value to the children when              
          they contributed the stock to the partnerships, they did not make           
          gifts on formation of the partnerships.                                     
               Respondent does not dispute that the partnerships are valid            
          under Missouri law or that the partnerships have economic                   
          substance.  Respondent contends, however, that petitioners’                 
          transfers of the stock to the partnerships, coupled with the                
          transfer of limited partnership interests to the children, were             
          indirect gifts of the stock to the children.  Accordingly,                  
          respondent argues that the stock, and not the partnership                   
          interests, should be valued for gift tax purposes.  Respondent              
          argues that “the transitory allocations to petitioners’ capital             
          accounts, if such allocations even occurred at all, were merely             
          steps in integrated transactions intended to pass the stock to              
          the petitioners’ children in partnership form.”                             

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Last modified: May 25, 2011