Respondent determined deficiencies in petitioners' Federal
income taxes for the taxable years 1991, 1992, and 1993 in the
amounts of $1,621, $1,457, and $1,770, respectively.
The sole issue for decision is whether petitioners are
liable for self-employment tax. The resolution of this issue
depends on whether petitioner Kenneth C. Schmidt materially
participated in the production of beets on his farm.
FINDINGS OF FACT
Some of the facts have been stipulated, and they are so
found. Petitioners resided in Richfield, Wisconsin, at the time
that their petition was filed with the Court.
1. General Background
Petitioner Kenneth C. Schmidt (petitioner) is principally a
dairy farmer. Petitioner also farms approximately 250 acres of
land. Petitioner works on his farm every day of the week for
about 15 hours per day.
2. The Beet Contracts
In 1991, petitioner and Dean Foods Co. (Dean Foods) entered
into a "Canning Beet Contract" in which petitioner agreed to grow
200 tons of canning beets on 16 acres of land. In 1992 and 1993,
petitioner entered into similar contracts with Dean Foods except
that he agreed to grow 250 tons of canning beets on 18 acres of
land during such years. Each contract required petitioner to
furnish the "machinery, labor, and other facilities necessary for
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