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required to accept the self-serving testimony of Mr. McNamara as
gospel. Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).
Although petitioners contend that the written lease agreement did
not require them to materially participate in the farming
operations, the record supports a finding that petitioners played
a material role in the production of agricultural commodities
under an arrangement with McNamara Farms.
For about 21 years through the taxable years at issue, Mr.
McNamara performed general farming services on the farm on a
regular and intermittent basis, as we detailed in the findings of
fact. Mrs. McNamara failed to testify, but it is clear that for
a good number of years she did the same. 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
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