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NEIN | No that is not correct. If he sets up an operating LLC that elects to be taxed as an S-corp, and rents his personally owned farm to that LLC, the rent portion is not subject to self employment tax as long as the rent is reasonable for the area. See the McNamara case just settled in the 8th circuit. They ruled on just this situation. A nice article is the December issue of Progressive Farmer about it and the ruling. The key being reasonable rent for the area I believe, but it would be nice if Jake jumps in and clarifies this. | |
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Putting Farm into a LLC
