Utah Jojoba I Research, William G. Kellen, Tax Matters Partner - Page 22

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          fertilized with "10340".  "Uran 32" and "10340" were fertilizers             
          generally available to the farming community in 1983.  The final             
          part of the amended research plan specified that 5 acres of the              
          80-acre parcel allocated to Utah I was to be divided into 4                  
          subplots.  Each of the four subplots was to be planted with seed             
          collected and cataloged by U.S. Agri as to specific geographic               
          origin.  Once the jojoba plants had emerged, they were to be                 
          irrigated at a specific rate.                                                
               The record does not establish that the above-described                  
          procedures ever were carried out.  Petitioner's business records             
          contain no formal compilation of research data or scientific                 
          analysis completed for Utah I.  U.S. Agri's only records of the              
          work allegedly carried out on behalf of Utah I are 16 pages of               
          handwritten notes reflecting Pace's personal observations on the             
          growth of the jojoba plants from April 1983 through December                 
          1985.  Pace's notes were made at irregular intervals and contain             
          no scientific data.  For example, in July 1983 Pace states in his            
          notes "Emergence is very good.  Continue everything exactly as it            
          is."  One year later in July 1984, Pace noted "1, 2 & 3 [a]ll                
          look good but weeds in one are quite a problem.  No observable               
          damage or losses in 2 or 3 but probably too soon to tell."  There            
          is no evidence that Agri Futures, as the farm manager for U.S.               
          Agri, prepared any reports regarding the status of the jojoba                
          being grown on land allocated to Utah I.                                     





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