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commodities (including livestock * * *) on such land, and
that there shall be material participation by the owner or
tenant * * * in the production or the management of the
production of such agricultural * * * commodities, and (B)
there is material participation by the owner or tenant * * *
with respect to any such agricultural * * * commodity;
In other words, as the regulations provide in pertinent
part, if the rental income is derived under an arrangement
between the owner of land (owner) 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 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 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).
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