- 2 -
CONTENTS
Page
MEMORANDUM FINDINGS OF FACT AND OPINION........................2
OPINION OF THE SPECIAL TRIAL JUDGE.............................3
FINDINGS OF FACT...............................................4
A. Background...............................................4
1. The Jojoba Industry in General.......................4
2. Carole A. Whittaker..................................5
3. Joseph E. Berberich..................................7
4. Jojoba Development Partners, Ltd.....................9
a. The Private Offering Memorandum..................9
b. The Research and Development Agreement..........15
c. The Option and Joint Venture Agreement..........20
d. The Farm Lease..................................23
e. The Option and Farm Lease Agreement.............24
5. Petitioners.........................................25
a. Petitioners Stephen H. Glassley and Judith S.
Glassley........................................25
b. Petitioner Paul S. Mahoney......................28
c. Petitioners Edward F. Houser, Jr. and Kathryn G.
Houser..........................................29
B. The Jojoba Plantation...................................32
C. The Consequences of Petitioners' Initial Investment.....41
D. The Experts.............................................43
1. Paul H. Gross.......................................43
2. Dr. Eberhardt.......................................47
3. Marvin T. Parr......................................48
OPINION.......................................................51
A. The Criteria That Must Be Satisfied For Expense Treatment
Under Section 174.......................................51
1. The Expenditures Must Be For Research or
Experimentation.....................................52
2. The Expenditures Must Be Paid or Incurred on Behalf
of the Taxpayer.....................................64
3. The Expenditures Must Be Paid or Incurred in
Connection with the Taxpayer's Trade or Business....68
B. Negligence..............................................77
1. Petitioners Glassley and Houser.....................78
2. Dr. Mahoney.........................................82
C. Increased Interest......................................82
MEMORANDUM FINDINGS OF FACT AND OPINION
DAWSON, Judge: These cases were assigned to Special Trial
Judge Norman H. Wolfe pursuant to the provisions of section
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011