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any such * * * commodity * * * [Sec. 1402(a)(1); emphasis
added.]
In other words, if the rental income is derived under an
arrangement which provides for the production of agricultural
products on the land of the owner or tenant (the owner) and
further obligates the owner to materially participate in the
production or the management of the production of agricultural
commodities, and the owner actually materially participates in
the production or the management of the production of
agricultural commodities, then the rental income received by the
owner pursuant to the arrangement is considered earnings from
self-employment. See sec. 1.1402(a)-4(b)(3)(i), Income Tax Regs.
The parties do not dispute this proposition. They further agree
if one or more of the above elements is missing, the rental
income would be excluded from the definition of self-employment
income.
In this case, the parties have stipulated that the leases
provide for the production of agricultural products on the
property by the partnership, that agricultural products were
produced on the property by the partnership during the years in
issue, and that petitioner materially participated in the
production of the agricultural products. Further, petitioner
agrees that as a partner in Mizell Farm, he was obligated to
materially participate in the production of agricultural products
on his property. Notwithstanding the above, petitioners take the
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Last modified: May 25, 2011