- 75 -
research and development period because that period coincided
with the maturation period of the jojoba plants. The only
ostensible difference in the relationship between JDP and HJI is
that allegedly after 1986, as general partners, both JDP and HJI
would be jointly liable for any debts and losses of a joint
venture. In the present cases, however, we find that difference
to be without distinction. We are guided by the maxim that "the
relevant inquiry is the actual manner, not the form, in which the
parties intended to structure their relationship." Slappey Drive
Indus. Park v. United States, 561 F.2d 572, 583 (5th Cir. 1977),
affg. Cairo Developers, Inc. v. United States, 381 F. Supp. 431
(M.D. Ga. 1974); see also Saviano v. Commissioner, 765 F.2d 643,
650 (7th Cir. 1985), affg. 80 T.C. 955 (1983). JDP was a limited
partnership. Consequently, the potential liability of the
individual partners did not change as a result of the formation
of Turtleback Jojoba Venture.
The mere presence of a profit motive, moreover, is not
determinative of whether the section 174 deduction will be
allowed. What is significant in the instant cases is that JDP
never actually managed or controlled the use or marketing of the
results of the research or experimentation. See Harris v.
Commissioner, 16 F.3d 75 (5th Cir. 1994), affg. T.C. Memo. 1990-
80.
JDP did not have a realistic prospect of carrying on its own
jojoba farming business. Even though JDP had an option to farm
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