Limited partnerships, limited liability partnerships, limited liability companies, corporations, and other similar legal entities.

CFR · 2024-01-01 · US · Title 7

(a) A limited partnership, limited liability partnership, limited liability company, corporation, or other similar legal entity will be considered to be actively engaged in farming with respect to a farming operation if: (1) The legal entity independently and separately makes a significant contribution to the farming operation of capital, equipment, or land, or a combination of capital, equipment, or land; (2) Each partner, stockholder, or member with an ownership interest or their spouse with an ownership interest makes a contribution, whether compensated or not compensated, of active personal labor, active personal management, or a combination of active personal labor and active personal management to the farming operation; that are: (i) Performed on a regular basis; (ii) Identifiable and documentable; and (iii) Separate and distinct from the contributions of any other partner, stockholder or member of the farming operation; (3) The collective contribution of the partners, stockholders and members is significant and commensurate; (4) The legal entity has a share of the profits or losses from the farming operation commensurate with the legal entity's contributions to the operation; and (5) The legal entity makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the legal entity's claimed share of the farming operation. (b) If any partner, stockholder, or member fails to meet the requirements in paragraph (a)(2)

official document · source cfr-2024 · id 7:§ 1400.204