Vincent E. & Judy Bot - Page 2

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                                  FINDINGS OF FACT                                    
               Respondent determined deficiencies in petitioners' 1993,               
          1994, and 1995 Federal income taxes in the amounts of $2,106,               
          $2,204, and $2,223, respectively.                                           
               The sole issue for decision is whether rental payments                 
          received by petitioner Judy Bot (Mrs. Bot) from petitioner                  
          Vincent E. Bot (Mr. Bot) are includable in Mrs. Bot's net                   
          earnings from self-employment under section 1402(a)(1) and thus             
          subject to self-employment taxes.                                           
               Some of the facts have been stipulated and are so found.               
          Petitioners resided in Minnesota at the time the petition was               
               Mr. and Mrs. Bot have farmed for approximately 38 years.               
          During the taxable years at issue, Mr. Bot operated a 460-acre              
          crop and livestock farm as a sole proprietorship in Minneota,               
          Minnesota.  Mr. Bot owned 160 acres of the farm.  Mr. Bot rented            
          the remaining 300 acres of the farm, under cash rental agreements           
          at approximately $90 per acre, from Mrs. Bot and Bruce B. Bot.              
          During the taxable years at issue, Mr. Bot rented 240 acres of              
          farmland from Mrs. Bot for $90 per acre for a total of $21,600              
          per year.                                                                   
               Mrs. Bot owned the farmland in her own name.  She inherited            
          one-eighth of the farmland from her parents, and purchased the              
          remaining seven-eighth from her siblings sometime about 1974.               

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