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to the rent on the farm real estate paid to them by Fultz Farms.
Accordingly, petitioners argue they were not subject to self-
employment tax. See McNamara v. Commissioner, 236 F.3d 410 (8th
Cir. 2000), revg. T.C. Memo. 1999-333.
This dispute is simply stated as whether the lease
arrangement with Fultz Farms precludes the inclusion of the MCP
value-added payments in petitioners’ self-employment income.
There are several aspects of the UMAs with MCP and the facts
regarding the MCP payments that present impediments to
petitioners’ position.
To purchase units in MCP, the purchaser was required to own
stock in MCP. Petitioners owned the MCP stock; Fultz Farms did
not. Petitioners entered into UMAs with MCP that appointed MCP
as their agent, and they agreed to deliver the requisite
quantities of corn to MCP each year. Fultz Farms was not a party
to any agreement with MCP. In their agreements with MCP,
petitioners represented themselves as the growers or owners of
corn. Petitioners were personally obligated to MCP and
personally benefited from their agreements with MCP through the
receipt of payments from MCP.
Petitioners’ position presents an argument analogous to the
taxpayers’ argument in Bot v. Commissioner, supra. The Bots
argued that their intent in purchasing the MCP equity units was
to make an investment; they reasoned that this subjective intent
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