- 12 -                                         
               We need not discuss the burden of proof.  We decide this               
          case on the preponderance of the evidence.  Whether the                     
          children’s interests were held in valid trusts or not is not                
          material to our decision.                                                   
               Section 25.2511-1(h)(1), Gift Tax Regs., provides that a               
          transfer of property by a taxpayer to a corporation represents a            
          gift by the taxpayer to the other shareholders of the corporation           
          to the extent of their proportionate interests in the                       
          corporation.  In Shepherd v. Commissioner, 115 T.C. 376, 389                
          (2000), affd. 283 F.3d 1258 (11th Cir. 2002), we applied the                
          principle that, like a transfer of property to a corporation, a             
          transfer of property to a partnership for less than full and                
          adequate consideration may represent a gift to the other                    
               In Shepherd, the taxpayer transferred real property and                
          stock to a newly formed family partnership in which he was a                
          50-percent owner and his two sons were each 25-percent owners.              
          Id. at 380-381.  Rather than allocating contributions to the                
          capital account of the contributing partner, the partnership                
          agreement provided that any contributions would be allocated                
          pro rata to the capital accounts of each partner according to               
          ownership.  Id. at 380.  Because the contributions were reflected           
          partially in the capital accounts of the noncontributing                    
          partners, the value of the noncontributing partners’ interests              

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