Utah Jojoba I Research, William G. Kellen, Tax Matters Partner - Page 3

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          allegedly paid or incurred for research and experimental                     
          expenditures as deductible trade or business expenses.                       




                                   FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.                
          The stipulation of facts and the exhibits attached thereto are               
          incorporated herein by this reference.                                       
               The jojoba plant is a shrub that is generally found on the              
          periphery of the Sonora Desert.  While classified as a member of             
          the boxwood family, it is not closely related to any other plant.            
          .  The jojoba plant produces a seed, sometimes referred to as a              
          bean, that contains approximately 50 percent by weight of an                 
          unusual oil.  Jojoba oil is actually a liquid wax ester, unlike              
          the triglyceride oils typically produced by plants, and is                   
          similar to sperm whale oil.                                                  
               It takes 5 years or more for a jojoba plant to produce seeds            
          in a harvestable quantity.  Jojoba oil is useful for a variety of            
          products, ranging from cosmetics to industrial lubricants.                   
               The ban in 1971 on the importation of sperm whale oil                   
          stimulated an interest in the commercial production of jojoba                
          oil.  In 1978, an estimated 2,200 acres of jojoba were planted in            
          Arizona and California.  At that time, it had been estimated that            
          25,000 acres of jojoba would be sufficient to replace the sperm              





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