Ward AG Products, Inc. - Page 14

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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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