- 6 - provides that such other person shall produce agricultural commodities on such land, and that there shall be material participation by the owner in the production or the management of the production of such agricultural commodities, and there is such material participation by the owner, then the rental income received by the owner pursuant to the arrangement is considered earnings from self-employment. Sec. 1.1402(a)-4(b), Income Tax Regs. Such income is characterized as "includible farm rental income". Id. In determining whether compensation is includable in self-employment income under sections 1401-1403 such provisions are to be broadly construed so as to favor coverage for Social Security purposes. Braddock v. Commissioner, 95 T.C. 639, 644 (1990). The rental exclusion in section 1402(a)(1) is to be strictly construed to prevent this exclusion from interfering with the congressional purpose of effectuating maximum coverage under the Social Security umbrella. Johnson v. Commissioner, 60 T.C. 829, 832 (1973). Petitioners contend that the oral lease agreement does not require material participation by Mrs. Bot in the farming operations. Petitioners further contend that the rental income that Mrs. Bot received from Mr. Bot was rental from real estate, and therefore should be excluded in determining whether Mrs. BotPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011