Cactus Wren Jojoba, Ltd., Cecil R. Almand, Tax Matters Partner - Page 6

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            general partners of Yuma Mesa, and Woodburn was TMP.5  No                                    
            investments in Yuma Mesa were made prior to December 31, 1982,                               
            and no activity, other than document execution, concerning Yuma                              
            Mesa occurred during 1982.  The parties have stipulated that Yuma                            
            Mesa began business on December 31, 1982.  Using the accrual                                 
            method of accounting and an election under section 174, Yuma Mesa                            
            deducted $1,298,031 as research and development expenses for the                             
            taxable year ending on December 31, 1982.  However, no activity                              
            under the research and development agreement occurred prior to                               
            December 31, 1982.                                                                           
                  In 1982, Woodburn and Sullivan were partners in the law firm                           
            of Woodburn and Sullivan located in Dallas, Texas.  Sometime in                              
            1982, one of the principals of the accounting firm Meinke, Damer,                            
            and Peterson6 (Meinke firm) approached Sullivan or Woodburn                                  
            regarding the possibility of having both of them serve as the                                
            general partners of a limited partnership with a described                                   
            purpose of conducting research and development of the jojoba                                 
            plant and its product, the jojoba nut (or bean).  Sullivan and                               
            Ray Meinke (Meinke), had known each other since Sullivan's                                   
            graduation from law school in 1963.  Over the years, they                                    


            5     William Woodburn retired in 1985 for health reasons and                                
            resided in Hawaii at the time of trial.  His co-general partner,                             
            G. Dennis Sullivan (Sullivan), testified at trial.  Sullivan is a                            
            party to these cases pursuant to sec. 6226(c) and (d).                                       
            6     The principals were Raymond Meinke (Meinke), Keith Damer                               
            (Damer), and Marlin Peterson (Peterson).                                                     




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