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this investment, in accordance with the Schedule K-1, Partner’s
Share of Income, Credits, Deductions, etc., which the partnership
had provided to petitioner. Petitioners did not consult with any
attorney or accountant with tax expertise prior to filing their
return and they filed the return without the assistance of a
return preparer, relying on the return preparation instructions
provided by the Internal Revenue Service.
As the result of partnership level proceedings concerning
Jojoba Research Partners, this Court ultimately entered a
decision disallowing in full the partnership’s claimed ordinary
loss of $678,439 for taxable year 1982. This decision was based
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.
Following the entry of the decision concerning the
partnership, respondent adjusted petitioners’ 1982 return by
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