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How is material participation in farm production determined?
Four tests are used in determining whether your are materially participating in the production of farm commodities.
Last Revised: March, 2001
- How is material participation established in a farm rental arrangement?
- What combination of activities is required to demonstrate material participation in farm rental agreements?
- Test III: 100 Hours of Work Over 5-Week Period
- Periodic Inspection of Production Activities
- Does farm rental income count as net earnings?
- What rental income must be included in calculating earnings?
- Are federal agricultural program payments included in gross farm income?
- Owner of Land on Which Business is Operated
- If Tests I - III are not met, is material participation still possible?
- Advice and Consultation
- Costs of Production
- What are the criteria for Test II: Decisions Affecting Success of Enterprise?
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