Norman H. Fawson and Mary Jane B. Fawson - Page 8

                                        - 8 -                                         
          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                   
               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.                                             

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011