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to this opinion. The lease rate on MCP shares rented from
petitioners was 50 cents per bushel of corn delivered to MCP.
MCP was not a party to the lease arrangement, and Fultz Farms was
neither a shareholder nor a member of MCP.
In 1994 and 1995, Mr. Fultz personally received value-added
payments from MCP by check. When Mr. Fultz received the checks
for value-added payments from MCP in his name, he deposited the
checks within a day or two, and he or Mrs. Fultz then wrote out
personal checks to Fultz Farms for the same amounts.
b. Petitioners’ Member Activity With MCP
In 1994, Mr. Fultz received value-added payments from MCP of
$10,590, and in 1995 he received $15,718 in value-added payments.
For both years, processed corn had a higher fair market value
than raw corn.
The amounts of the value-added payments had no impact on the
amount petitioners were to receive under the leases. Fultz Farms
had no contractual relationship with MCP with respect to the
value-added payments. For both 1994 and 1995, Fultz Farms
experienced shortfalls in the required bushels Mr. Fultz was to
produce. As a result, Mr. Fultz had to purchase 26,000 bushels
of pool corn in 1994 to supplement the 9,600 bushels actually
delivered and 8,403 bushels of pool corn in 1995 to supplement
the 10,797 bushels actually delivered.
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