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petitioners concerning any purported research or experimental
work for petitioners. A party's failure to introduce evidence
within his possession which, if true, would be favorable to him,
gives rise to the presumption that if produced it would be
unfavorable. Wichita Terminal Elevator Co. v. Commissioner, 6
T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947). The
record shows that these cases are further examples of efforts by
promoters and investors in the early 1980's to reduce the cost of
commencing and engaging in the farming of jojoba by claiming,
inaccurately, that capital expenditures in jojoba plantations
might be treated as research or experimental expenditures for
purposes of claiming deductions under section 174. Glassley v.
Commissioner, T.C. Memo. 1996-206; Stankevich v. Commissioner,
T.C. Memo. 1992-458.
Since Yuma Mesa and Cactus Wren did not directly or
indirectly engage in research or experimentation, we hold that
they are not entitled to a deduction for these expenditures under
section 174.
B. Requirement of a Trade or Business
In addition, we hold that the activities of Yuma Mesa and
Cactus Wren did not constitute a trade or business. To be
entitled to deductions for research and development expenditures,
a taxpayer need not be currently producing or selling any
product. Snow v. Commissioner, 416 U.S. 500, 503-504 (1974);
Zink v. United States, 929 F.2d at 1021. However, not every
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