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plantation and sold jojoba seeds harvested from jojoba plants
growing there under the name Turtleback Jojoba Venture.
For 1987, Turtleback Jojoba Venture reported a net farm loss
of $43,929 on Schedule F of its U.S. Partnership Return of
Income, Form 1065. For 1988, Turtleback Jojoba Venture reported
a net farm profit of $3,890 on Schedule F of its U.S. Partnership
Return of Income, Form 1065.12
At the same time that HJI exercised its option to enter into
Turtleback Jojoba Venture with JDP, HJI exercised an option to
convert the jojoba plantation purportedly allocated to JDP-II to
a commercial jojoba plantation and to enter into a joint venture
with JDP-II (Turtleback Jojoba Venture II). Thereafter, HJI
treated Turtleback Jojoba Venture and Turtleback Jojoba Venture
II as one jojoba plantation (TJV).
During late 1987, Whittaker informed Berberich that the TJV
plantation was in good condition and had excellent prospects for
producing profitable yields of jojoba seeds, but that TJV was out
of funds. She also indicated that harvesting efficiency was
unacceptably poor and that it would probably take several years
of continued development of machinery, equipment, and systems
before harvesting efficiency would be substantially improved. In
12 In the Schedule F for 1988, Turtleback I Venture reported a
farm rent expenditure of only $3,500, rather than the minimum
$12,000 rental fee required under the farm lease. Had Turtleback
I Venture reported the full $12,000 rental fee, the Schedule F
would have reflected a net farm loss of $4,610.
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