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substantial risk from farming because it (or Ward) lent money to
farmers and petitioner often sold items on credit to its
customers. We agree with petitioner that, to be a farmer, the
taxpayer must have participated to a significant degree in the
growing process and borne a substantial risk of loss from that
process. Maple Leaf Farms, Inc. v. Commissioner, supra at 448.
However, petitioner does not meet that standard because it did
not bear a substantial risk of loss from farming. Farmers had no
recourse if their crops failed or the market for their crops was
poor. Petitioner had liens, collateral, security interests, and
other rights and protections that farmers did not have.
Petitioner's liens and other security were not limited to the
current crop.
Petitioner contends that it had more than $600,000 in
uncollected accounts receivable when it was sold in August 1994.
Petitioner provided no details about those accounts. Even if
petitioner had $600,000 in uncollected accounts, the nature of
its risk was not like that of a farmer for the reasons stated in
the previous paragraph.
Petitioner contends that we should not consider the fact
that it had liens or other security interests because its
customers were 100-percent mortgaged and petitioner's claims were
subordinated to those mortgages. We disagree. There is only
vague and general testimony that all of petitioner's claims were
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