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Petitioners admitted that in addition to farrowing and other
activities concerning their swine, Mrs. Bot operated farm
machinery, harvested and bailed crops, and picked up supplies on
a semiweekly basis. As noted, Mrs. Bot worked on the farm
approximately 1,862 hours per year. We deem it immaterial that
Mrs. Bot also purportedly was paid a salary for her services with
a corresponding deduction taken on their tax returns. In our
view, these "regularly performed services are material to the
production of an agricultural commodity, and the intermittent
services performed are material to the production operations to
which they relate." Sec. 1.1402(a)-4(b)(6) Example (1), Income
Tax Regs.
The regulations provide in pertinent part, that if the
rental income is derived under an arrangement between the owner
of land and another person which 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.
Accordingly, we find that the rental income is includable farm
rental income that is part of Mrs. Bot's net earnings from self-
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