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arrangement) farmland7 and certain personal property that they
owned (petitioners’ farmland and personal property) located in
Renville, Minnesota.8 Pursuant to that arrangement, at all
relevant times, including during the years at issue, that company
paid rent to petitioners for the lease of petitioners’ farmland
and personal property, irrespective of whether or not that
company had a good farming year or had income. During the years
at issue, petitioners did not believe that they were, and they
were not, obligated or compelled to perform petitioners’ farm-
related activities in the production by G.E. Johnson, Inc., of
agricultural commodities as a condition to that company’s being
obligated pursuant to the oral rental arrangement to pay rent to
petitioners.9
Petitioners jointly filed Form 1040, U.S. Individual Income
Tax Return, for each of their taxable years 1993 (petitioners’
1993 return), 1994 (petitioners’ 1994 return), and 1995 (peti-
tioners’ 1995 return). In petitioners’ 1993 return, petitioners
7G.E. Johnson, Inc., also leased certain other farmland from
third-party landlords pursuant to oral rental arrangements with
those third-party landlords.
8During the years at issue, petitioners had no written
rental agreement with G.E. Johnson, Inc.
9Even if during the years at issue petitioners became sick
or incapacitated or otherwise were unable to perform for G.E.
Johnson, Inc., petitioners’ farm-related activities in the
production of agricultural commodities, that company was nonethe-
less obligated pursuant to the oral rental arrangement to pay
rent to them.
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Last modified: May 25, 2011