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investors' return, if any, was to be in the form of a royalty
pursuant to the licensing agreement. Thus, as this Court held in
Utah Jojoba I Research v. Commissioner, supra, the partnership
was never engaged in research or experimentation, either directly
or indirectly. Moreover, this Court found in Utah Jojoba I
Research v. Commissioner, supra, that U.S. Agri's attempts to
farm jojoba commercially did not constitute research and
development, thereby concluding that the R & D agreement was
designed and entered into solely to decrease the cost of
participation in the jojoba farming venture for the limited
partners through large up-front deductions for expenditures that
were actually capital contributions. The Court concluded further
that the partnership was not involved in a trade or business and
had no realistic prospect of entering into a trade or business
with respect to any technology that was to be developed by U.S.
Agri.
Petitioner contends that his investment in Utah I was
motivated solely by the potential to earn a profit. Petitioner
contends further that his reliance on the advice of his certified
public accountant, Mr. Salgo, and his investment adviser, Dr.
Stephan, should absolve him of liability for the negligence
penalty in this case. Petitioner also argues that, taking into
account his experience and the nature of the investment in Utah
I, he exercised the due care that a reasonable and ordinarily
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