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of entering into a trade or business with respect to any
technology that might be developed. Consequently, we held that
"Everything that * * * [the taxpayers] did was wholly consistent
with investor activity, not the activity of a person engaged in
an active trade or business." Id.
In determining whether research and development expenditures
were incurred in the taxpayer's trade or business, this Court has
considered a two-step inquiry: (1) Whether the taxpayer's
activities in connection with the venture were sufficiently
substantial and regular to constitute a trade or business and (2)
whether the taxpayer had the requisite profit objective in
undertaking the activity. See Green v. Commissioner, 83 T.C.
667, 687 (1984); Stankevich v. Commissioner, supra. Petitioners
contend that such requirements have been satisfied in the present
cases because TJV's primary motive in farming jojoba was to
realize profit, and its farming operations were continual and
regular.
Petitioners contend that the present cases are
distinguishable from cases such as Green v. Commissioner, supra,
Levin v. Commissioner, supra, and Stankevich v. Commissioner,
supra, because JDP actually formed a joint venture with HJI in
1987 that commercially farmed jojoba. Petitioners argue that the
formation and operation of that joint venture is determinative of
the trade or business question. We do not agree. The fact that
some enterprise, be it HJI or TJV, was conducting commercial
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