John P. & Teresa Hennen - Page 8

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               The parties stipulated that Mr. Hennen used the land rented             
          from Mrs. Hennen in the farming operations to produce                        
          agricultural commodities such as livestock and crops.  With                  
          respect to whether under the arrangement Mrs. Hennen was to                  
          materially participate in the farming operations, we look not                
          only to the obligations imposed upon Mrs. Hennen by the oral                 
          lease, "but to those obligations that existed within the overall             
          scheme of the farming operations which were to take place" on                
          Mrs. Hennen's property.  Mizell v. Commissioner, T.C. Memo. 1995-            
          571.  (Emphasis supplied.)  These include Mrs. Hennen's                      
          obligations as a longstanding participant in the farming business            
          as well as the "general understanding between * * * [Mr. Hennen              
          and Mrs. Hennen] with respect to the production of agricultural              
          products".  Id.  Viewed in this light, the arrangement between               
          Mr. and Mrs. Hennen provided, or contemplated, that Mrs. Hennen              
          materially participate in the production of agricultural                     
          commodities on the farmland.                                                 
               Mr. Hennen claimed he made all the management decisions.  He            
          acknowledged that he had farmed with his wife for 38 years.  Mr.             
          Hennen candidly stated in the answer to the following question:              
               Respondent:  Q    And in fact, she does materially                      
               participate and help out and pull her share.                            
               Mr. Hennen:  A    If you are familiar with the farm, sir,               
               that's what makes a farm successful.  Everybody carries                 
               their weight.                                                           

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