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was enhanced by the contributions of the taxpayer. Accordingly,
we held that the transfers to the partnership were indirect gifts
by the taxpayer to his sons of undivided 25-percent interests in
the real property and stock. Id. at 389. The Court of Appeals
for the Eleventh Circuit affirmed our decision for the reasons
stated in our Opinion.
Petitioners’ transfers of stock in the instant case are
similar to the transfer of property in Shepherd. In both cases,
the value of the children’s partnership interests was enhanced by
their parents’ contributions to the partnerships. Petitioners
attempt to distinguish Shepherd by referring to our statement in
that case that “not every capital contribution to a partnership
results in a gift to the other partners, particularly where the
contributing partner’s capital account is increased by the amount
of his contribution”. Id. at 389. Petitioners argue that, in
the instant case, petitioners’ capital accounts were increased by
the amount of their contributions. Petitioners further argue
that, under Estate of Jones v. Commissioner, 116 T.C. 121 (2001),
it is irrelevant that the contributions of the stock to the
partnerships and the transfers of the partnership interests to
the children occurred on the same day.
In Estate of Jones, the taxpayer contributed property to the
partnerships and received continuing limited partnership
interests in return. All of the contributions of property were
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