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800-head capacity hog barn represented fair market rent. Conse-
quently, petitioners’ reliance on the following conclusions of
the Court of Appeals for the Eighth Circuit in McNamara II is
misplaced:23
Rents that are consistent with market rates very
strongly suggest that the rental arrangement stands on
its own as an independent transaction and cannot be
said to be part of an “arrangement” for participation
in agricultural production. Although the Commissioner
is correct that, unlike other provisions in the Code,
� 1402(a)(1) contains no explicit safe-harbor provision
for fair market value transactions, we conclude that
this is the practical effect of the “derived under”
language.
McNamara v. Commissioner, 236 F.3d at 413.
We turn now to petitioners’ contention that petitioners
received compensation for petitioners’ farm-related activities in
the production by JJ & P Farms, Inc., of agricultural commodities
with respect to processing hogs through petitioners’ 800-head
capacity hog barn, which did not include the 1995 claimed rent
for such barn. Petitioners do not point to any evidence in
support of that contention. That is because there is none. The
record establishes, indeed Mr. Solvie testified, and we have
23Having found that petitioners have failed to establish
that the 1995 claimed rent for petitioners’ 800-head capacity hog
barn represented fair market rent, we reject petitioners’ argu-
ment that
adoption of the Commissioner’s position would compel
the conclusion that the Solvies, as landlords, are
required to rent property to the corporation at below
fair market value and below the rates paid to third
parties. * * *
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