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Kathryn J. Sedo, for petitioners.
Blaine C. Holiday, for respondent.
MARVEL, Judge: Respondent determined deficiencies in
petitioners’ Federal income tax for 1994 and 1995 of $7,239 and
$13,716, respectively.
The sole issue for decision is whether petitioners are
liable for self-employment tax under section 14011 on value-added
payments that they received in 1994 and 1995 from an agricultural
cooperative of which they were active members.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated in our opinion by this
reference. Petitioners resided in Marshall, Minnesota, when the
petition in this case was filed.2
During all relevant years, Richard J. Bot (Mr. Bot) and
Phyllis Bot (Mrs. Bot) owned and lived on a 700-acre farm in
Minnesota. Before 1988, petitioners ran their farm operation,
growing crops such as corn, alfalfa, and soybeans and raising
livestock. In the fall of 1987, however, petitioners decided to
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. Monetary amounts are rounded to the nearest dollar
where appropriate.
2Petitioners live in Texas from November to April.
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