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Petitioners Houser reported adjusted gross income of $79,103.92
on their 1981 Federal income tax return and $142,708 on their
1982 Federal income tax return. Dr. Houser retired from the
practice of medicine in 1991.
Dr. Houser first became interested in investing in jojoba
during 1978 or 1979 after reading articles about the plant in a
number of investment newsletters. During 1981, he read Rowe's
jojoba-related articles in the Wall Street Digest. Dr. Houser
wrote to Rowe, and was referred to Whittaker. Dr. Houser was
impressed with her credentials and telephoned her. She referred
him to Berberich, who subsequently sent Dr. Houser a copy of the
offering circular.
Dr. Houser studied the offering, including the tax opinion.
He discussed the offering with his certified public accountant,
who did not raise any concerns about the potential investment.
Dr. Houser also discussed the offering with his brother, an
attorney, who told Dr. Houser that the law firm issuing the tax
opinion was reputable and that, in the brother's opinion, the
offering looked promising.
On December 28, 1981, petitioners Houser subscribed to one
partnership unit of JDP at a total cost of $50,000. As a result
of their capital contribution to JDP, petitioners Houser acquired
an 11.1-percent capital interest in JDP. Also on December 28,
1981, they executed the signature page to the certificate and
agreement of limited partnership and certificate of fictitious
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