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secs. 6221-6233. Under section 6221, the tax treatment of
partnership items is determined at the partnership level. We
conclude that Yuma Mesa and Cactus Wren are not entitled to
section 174(a) research and experimental expense deductions for
1982 and 1983 because petitioners did not directly or indirectly
engage in research or experimentation. In addition, we hold that
both of the limited partnerships lacked a realistic prospect of
entering a trade or business. Zink v. United States, 929 F.2d
1015, 1021 (5th Cir. 1991).
This Court previously has addressed the deductibility of
purported research and development expenditures under section 174
by limited partnerships formed for the purported purpose of
engaging in agricultural research and development of the jojoba
plant. Glassley v. Commissioner, T.C. Memo. 1996-206; Stankevich
v. Commissioner, T.C. Memo. 1992-458. In the Glassley and
Stankevich cases, we held that the taxpayers were not entitled to
deductions for research and experimentation expenditures under
circumstances similar to those presented in these consolidated
cases.
The evidence presented in these cases persuades us that the
R&D agreements before us were mere window dressing, designed and
entered into solely to decrease the cost of participation in the
jojoba farming venture for the limited partners through the
mechanism of a large upfront deduction for expenditures that in
actuality were capital contributions. Glassley v. Commissioner,
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