John P. & Teresa Hennen - Page 2

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               The sole issue for decision is whether rental payments                  
          received by petitioner Teresa Hennen (Mrs. Hennen) from                      
          petitioner John P. Hennen (Mr. Hennen) are includable in Mrs.                
          Hennen's net earnings from self-employment under section                     
          1402(a)(1) and thus subject to self-employment taxes.                        
                                   FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.                
          Petitioners resided in Minnesota at the time the petition was                
               Mr. and Mrs. Hennen have farmed for 38 years since they have            
          been married.  During the taxable years at issue, Mr. Hennen                 
          conducted farming operations in Lyon County, Minnesota.  He had a            
          diversified farm and raised cattle, hogs, corn, soybeans,                    
          alfalfa, and wheat.  Mr. Hennen operated the farm as a sole                  
          proprietorship, but he actually farmed with his and Mrs. Hennen's            
          two sons.  The farm was 1100 acres in area.  Their house and a               
          house occupied by a son and his wife were on the farm premises.              
               Mr. Hennen owned about 320 acres, and Mrs. Hennen owned 200             
          acres.  The other acreage is rented from others.  Mr. Hennen                 
          rented the 200 acres of farmland from Mrs. Hennen for $16,000 per            
          year under an oral agreement.  Mr. Hennen paid her $80 an acre,              
          which is comparable to the amount he paid to others.  Mr. Hennen             
          used the land rented from Mrs. Hennen in the farming operations              
          to produce agricultural commodities such as livestock and crops.             

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