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Commissioner, T.C. Memo. 1998-6.3 See Greene v. Commissioner,
supra. It is petitioners’ burden, in any event, to establish the
context in which their deductions were taken. See Rule 142(a);
Welch v. Helvering, 290 U.S. at 115; Bixby v. Commissioner, 58
T.C. 757, 791 (1972).
In Utah Jojoba I Research v. Commissioner, supra, we found
that the partnership was organized on December 27, 1982, as a
limited partnership with a described purpose of conducting
research and development (R&D) involving the jojoba plant. CFS
prepared the private placement memorandum (the offering) dated
November 10, 1982, and an R&D agreement and licensing agreement
executed on December 31, 1982. The partnership was formed with
subscriptions for 247 units for a total capitalization of
$2,094,560.
The offering identified William G. Kellen as the general
partner and characterized him as having “no previous experience”
with respect to jojoba beans. The offering also indicated that
3 Although the parties disagree as to what was apparent
from the partnership’s promotional materials, they have
stipulated that the Court found in Utah Jojoba I Research v.
Commissioner, T.C. Memo. 1998-6, that the activities of the
partnership did not constitute a trade or business and that the
research and development and licensing agreements entered into by
the partnership had been designed and entered into solely to
provide a mechanism to disguise the capital contributions of
limited partners as currently deductible expenditures. In their
brief, petitioners request a finding of fact that the Court’s
decision found that the activities of the partnership did not
constitute a trade or business.
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