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land,10 or total rent of $50,400.11
In 1995, petitioners built an 800-head capacity hog barn
(petitioners’ 800-head capacity hog barn) on petitioners’ farm-
land. During that year, petitioners and JJ & P Farms, Inc.,
orally modified the oral rental arrangement (modified oral rental
arrangement) to reflect that, after the completion of that barn,
petitioners were leasing to JJ & P Farms, Inc., petitioners’
farmland,12 including petitioners’ 800-head capacity hog barn
located on that land, as well as petitioners’ personal prop-
erty.13 Pursuant to the modified oral rental arrangement, during
1995 JJ & P, Farms, Inc., was required to, and did, pay to
petitioners (1) for petitioners’ farmland and petitioners’
10It is not clear from the record whether in 1993 and 1994
the rent for petitioners’ farmland, exclusive of existing build-
ings on that land (i.e., $29,400) or the rent for the buildings
(i.e., $21,000) on that land included rent for petitioners’
personal property.
11As discussed below, petitioners reported in their 1993 tax
return $52,050 in rent received from the lease of petitioners’
farmland and petitioners’ personal property. The record does not
disclose the reason for the discrepancy between the total amount
of rent that petitioners received during 1993 from such lease
(i.e., $50,400) and the total amount of rent (i.e., $52,050) that
petitioners reported in their 1993 tax return.
12For convenience, unless otherwise indicated, we shall
hereinafter refer to petitioners’ farmland, exclusive of peti-
tioners’ 800-head capacity hog barn located on that land, as
petitioners’ farmland.
13During 1995, petitioners had no written rental agreement
with JJ & P Farms, Inc., with respect to the lease of petition-
ers’ farmland, including petitioners’ 800-head capacity hog barn
located on that land, and petitioners’ personal property.
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