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disregarded under State law simply does not ring true.
Petitioners rely primarily on Hansen v. Commissioner, T.C.
Summary Opinion 1998-91, which has no precedential value, see
sec. 7463(b), and Felber v. Commissioner, T.C. Memo. 1992-418,
affd. without published opinion 998 F.2d 1018 (8th Cir. 1993),
for the proposition that the value-added payments are not subject
to self-employment tax. In Felber, we held that a wheat farmer
was not liable for self-employment tax on income received by him
and generated from the sale of wheat by a tenant farmer under a
crop-sharing agreement because we found that the taxpayer was
retired and was only minimally involved in the production of
wheat. The issue, however, was whether the exclusion from net
earnings for rentals from real estate applied.16 See sec.
1402(a)(1); sec. 1.1402(a)-4(b), Income Tax Regs. We did not
address any argument that the taxpayer operated a trade or
business of acquiring and selling agricultural products through
the cooperative as his agent, and/or through the tenant farmer as
his agent, employee, or partner.
Unlike the parties in Felber v. Commissioner, supra, the
parties in this case have raised and argued issues focusing on
whether petitioners, after they retired from daily farming,
continued to carry on a trade or business by acquiring,
16Petitioners do not contend that the value-added payments
qualify for this exclusion.
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