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Center area.23 In any event, petitioner’s principal interest in
the plantations appears to have been to determine how the jojoba
plants were developing. There is no persuasive evidence in the
record to demonstrate that petitioner visited the plantations in
order to determine whether research or development was being
conducted. If petitioner had visited the plantations for that
purpose, he would have quickly discovered that U.S. Agri was
engaged in nothing more than a farming activity. See Kellen v.
Commissioner, T.C. Memo. 2002-19; Fawson v. Commissioner, supra.
Petitioner should have realized that in the absence of any
research and development, there could be no deduction for
research and experimental expenditures under section 174.
Fourth, petitioner contends that reliance on Mr. Kellen, Mr.
Pace, Mr. Jacobs, and a professor at the University of California
should absolve him of liability for negligence in this case. We
disagree that any such reliance was reasonable; rather, the
record demonstrates that petitioner failed to obtain competent,
independent, professional advice before investing in San
Nicholas.
23 Petitioner testified on direct examination as follows:
we pulled some gas tanks out of our rental yard, and I
sold them to [Mr.] Jacobs and took them down to the
Desert Center because he was going to use them. Well,
he was going to use one for water and one to store
diesel in. So, I was down there then and a couple of
other times.
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