- 31 -
name, offeree questionnaire, and a promissory note in the amount
of $35,000 payable to JDP in installments of $15,000 on or before
May 1, 1982, $10,000 on or before May 1, 1983, and $10,000 on or
before May 1, 1984, together with interest of 10 percent per year
of the unpaid balance. Petitioners Houser paid to JDP or its
escrow agent $15,000 on December 28, 1981, $16,160 on April 26,
1982, $12,000 on April 23, 1983, and $11,000 on April 27, 1984.
Dr. Houser was enthusiastic about the jojoba plant's
product development and profit potential. Petitioners Houser
traveled to Hyder, Arizona, and visited the jojoba plantation
during 1984 or 1985.
Dr. Houser was interested in making a profit from his
investment in JDP. According to Dr. Houser, he believed that,
after the jojoba plantation was commercialized and the crop
matured, income from his investment would supplement his
retirement income and help build an estate for the benefit of his
children and grandchildren. Dr. Houser would not have invested
in JDP if he had not believed that the joint venture would be
formed and that it would be profitable. He also was aware of and
attracted by the potential tax benefits outlined in the offering
of an investment in JDP.
On their 1981 Federal income tax return, petitioners Houser
claimed a net loss relating to JDP of $40,529, resulting in a tax
benefit of approximately $20,000. On their 1982 Federal income
tax return, petitioners Houser claimed a net loss relating to JDP
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011