Opinion ID: 771596
Heading Depth: 2
Heading Rank: 3

Heading: The Bots

Text: 9 Vincent E. and Jody Bot have been farming for thirty-eight years. During the tax years in issue--1993, 1994, and 1995--Mr. Bot owned 160 acres of the farm, and Mrs. Bot owned 240 acres. Mr. Bot rented Mrs. Bot's acreage pursuant to an oral agreement. In 1992, Mrs. Bot entered into an employment agreement with Mr. Bot. The agreement provided that Mrs. Bot was to perform various farm-related tasks, such as assisting with hog production and operating field machinery. The agreement essentially memorialized the tasks Mrs. Bot had performed since she began farming with Mr. Bot. 10 Like the McNamaras, the Bots filed jointly as a married couple. They reported on Schedule E for each year at issue that Mrs. Bot received net rental income of approximately $18,000. They also reported that Mrs. Bot received wages of roughly $15,000. The Commissioner determined that the rental payments Mrs. Bot received from Mr. Bot were includible as net earnings from self-employment under 1402(a)(1) and thus subject to self-employment tax. The Bots contested the Commissioner's determination in the Tax Court, which rejected the Bots' arguments in an opinion echoing its ruling against the McNamaras.