Utah Jojoba I Research, William G. Kellen, Tax Matters Partner - Page 46

                                        - 46 -                                         

          testified at trial that U.S. Agri was operating commercial jojoba            
          farms on 906 acres of land in Desert Center and Blythe,                      
          California, in addition to the 400 acres U.S. Agri had allegedly             
          set aside for R&D partnerships focused on jojoba.  Respondent's              
          expert witness, Chen, visited U.S. Agri's greenhouse and                     
          laboratory in Riverside, California.  The actions of Kellen,                 
          including irregular visits to the plantation site and forwarding             
          three of U.S. Agri's progress reports on the status of the                   
          maturing jojoba plants to the limited partners of Utah I, were               
          merely the actions of an interested investor keeping up with his             
          investment.  There is no evidence that Kellen ever inspected U.S.            
          Agri's laboratory or greenhouse.                                             
               There is no evidence before this Court regarding the details            
          of U.S. Agri's operating budget other than testimony from Pace               
          that none of U.S. Agri's losses were allocated to Utah I.                    
               Utah I had no employees.  See Harris v. Commissioner, 16                
          F.3d at 80 n.10.  Petitioner presented no evidence that Utah I               
          exercised any control over the activity on the jojoba plantation.            
          The evidence before us establishes that Utah I's role was to                 
          distribute the money invested by the limited partners to U.S.                
          Agri pursuant to agreement.  U.S. Agri then used these funds to              
          finance activities on the 80-acre plantation site, including                 
          planting the jojoba, tilling and leveling the land, and                      
          installing the irrigation system.  These funds were also used by             





Page:  Previous  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  Next

Last modified: May 25, 2011