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experimentation regarding cultivation of the jojoba plant on
behalf of Yuma Mesa and Cactus Wren, and consequently, under
section 174(a)(1), Yuma Mesa and Cactus Wren are entitled to
deduct the contract fees paid HTP and MBP for such research or
experimentation. Respondent's determinations are presumed
correct, and petitioners have the burden of proving otherwise.
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Attempts to farm jojoba commercially do not represent
research and development in the experimental or laboratory sense.
Glassley v. Commissioner, supra; Stankevich v. Commissioner,
supra. AI attempted to develop jojoba plantations that would be
farmed for the oil seed. The limited partners of Yuma Mesa and
Cactus Wren would realize income only through the sale of the
jojoba oil if the plantations had been successful. AI furnished
only one status report on the progress of the purported research
and development on plantation I. AI did not maintain a
laboratory on either plantation or adequately document any of its
purported research and development costs.
We agree with respondent's expert witness that AI's actions
were no more than what any farmer would do in the ordinary course
of preparing to grow a crop for commercial harvesting.
Petitioners chose not to call an expert witness in this trial.
There is no evidence suggesting that AI's efforts would lead to
patentable technology or even know-how. Additionally, we note
that Don Shooter, the farm manager for AI, did not testify for
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