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business must be carried on by the individual, either personally
or through agents or employees.” Sec. 1.1402(a)-2(b), Income Tax
Regs. The self-employment tax provisions are broadly construed
in favor of treating income as earnings from self-employment.8
Braddock v. Commissioner, 95 T.C. 639, 644 (1990); Hornaday v.
Commissioner, 81 T.C. 830, 834 (1983); Hennen v. Commissioner,
T.C. Memo. 1999-306; S. Rept. 1669, 81st Cong., 2d Sess. (1950),
1950-2 C.B. 302, 354.
Respondent does not directly dispute that petitioners
retired from daily farming in 1988. Respondent contends only
that petitioners engaged in a trade or business of acquiring and
selling corn and corn products for profit during 1994 and 1995
and that petitioners derived the value-added payments from that
trade or business.
Petitioners claim that they were not engaged in a trade or
business from which they derived the value-added payments.
Petitioners assert that the value-added payments constituted
investment income attributable to their ownership of MCP common
stock. Petitioners maintain they correctly reported the value-
added payments on their 1994 and 1995 tax returns as proceeds
from the sale of capital assets excludable from net earnings from
8We do not consider the provisions of subch. T of the Code,
secs. 1381-1388, pertaining to the income taxation of
cooperatives and their patrons, since none of the parties to this
case place any reliance on those provisions.
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