Don L. and Lora Christensen - Page 13




                                       - 13 -                                         

          partnership.  At the time of trial, Mr. Hulse was deceased;                 
          therefore, the details in this record surrounding his advice to             
          petitioners about Blythe II are scant.  Petitioner provided Mr.             
          Hulse with a copy of the offering and asked Mr. Hulse to review             
          the same and advise petitioners whether or not to invest in                 
          Blythe II.  Mr. Hulse advised petitioner that, in petitioner's              
          words, it appeared that "the risk reward justified an investment"           
          in Blythe II.  Mr. Hulse did not provide petitioners with a                 
          written opinion about the investment.  The record is devoid of              
          any evidence to show that Mr. Hulse conducted any independent               
          research or consulted any type of agricultural or jojoba plant              
          expert about the investment.  The record in this case indicates             
          that Mr. Hulse relied solely on the representations made in the             
          offering in rendering his advice to petitioners.                            
               Moreover, the record lacks evidence to show whether Mr.                
          Hulse had any previous experience with the deductibility of                 
          research and development expenses at the time he advised                    
          petitioners about Blythe II.  These types of expenses would have            
          allowed petitioners certain tax benefits above and beyond what              
          would have been provided by an ordinary business deduction.                 
          There is no evidence in the record to suggest that Mr. Hulse                
          conducted any independent investigation to determine whether the            
          specific research and development proposed to be conducted by or            
          on behalf of the partnership would have qualified for deductions            





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