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On their joint 1983 Federal income tax return, petitioners
reported wages of $86,000 from petitioner's medical practice and
a loss of $1,006 from Blythe II. Including the loss reported
from Blythe II, petitioners reported total net losses from
various partnerships of $33,680 for 1983. Thus, petitioners
reported an adjusted gross income of $71,351 and a total tax
liability of $9,133.4
Blythe II was audited by the Internal Revenue Service and a
Notice of Final Partnership Administrative Adjustment was issued
to the partnership. The partnership initiated a TEFRA proceeding
in this Court, and a decision was entered in Utah Jojoba I
Research v. Commissioner, T.C. Memo. 1998-6, which involved a
similar jojoba investment program.5 In the decided case, this
Court held that the partnerships6 did not directly or indirectly
3(...continued)
claimed on their original 1982 return. On the amended return,
petitioners reported a total tax liability of $8,617.
4 During December 1987, petitioners filed an amended
return for 1983 reporting an increase in adjusted gross income of
$6,132 due to respondent's disqualification of a pension and
profit-sharing plan to which petitioner made contributions during
1983. On the amended return, petitioners reported a total tax
liability of $10,360.
5 The tax matters partner of Blythe II signed a
stipulation to be bound by the outcome of Utah Jojoba I Research
v. Commissioner, T.C. Memo. 1998-6.
6 Eighteen docketed cases were bound by stipulation by
the outcome of Utah Jojoba I Research v. Commissioner, supra.
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