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upon a stipulation by the partnership and the Commissioner to be
bound by the outcome of the case in which this Court rendered our
opinion in Utah Jojoba I Research v. Commissioner, T.C. Memo.
1998-6. In that case, we found that the Utah Jojoba I Research
partnership (“Utah I”) was not entitled to a section 174(a)
research or experimental expense deduction (or a section 162(a)
trade or business expense deduction) because (a) Utah I did not
directly or indirectly engage in research or experimentation, and
(b) the activities of Utah I did not constitute a trade or
business, nor was there a realistic prospect of Utah I ever
entering into a trade or business. Id.
The Bronsons
Petitioner Seymour Bronson operated a retail business during
1983 which he had operated since 1949 and in which he had several
employees. The business took in gross receipts of $195,838
during the year in issue, for a profit of $15,706. Prior to
opening the business, Mr. Bronson had attended college for a time
and had served in the military in World War II. He has no
academic background in finance, economics, or taxation, but he
did have a course in accounting. He had limited experience in
investments prior to Arid Land.
Petitioner Phyllis C. Bronson also operated a retail
business during 1983. She had operated the business since 1973,
and during the year in issue the business took in gross receipts
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