TN 7 (06-90)
In many parts of the country it is not unusual for a farm owner to turn the operation
of the farm over to a tenant in return for rent in the form of cash or a percentage
of the agricultural or horticultural commodities raised.
The income of the landlord is includable in NESE if:
there is an agreement between the landlord and the tenant which contemplates that
the landlord will materially participate in the production or management of the production
of the commodities; and
the landlord does materially participate.
When any one of the 4 tests described in the following sections is met, the landlord
is materially participating.