Tax Court Rules that Farm Couple's Rent from Its S Corporation Not Subject to SE Tax

On September 27, the U.S. Tax Court ruled that a Texas farm couple was not liable to pay self-employment tax on rents they received from the S corporation through which they conducted a poultry growing operation. The decision in Martin v. Commissioner, 149 T.C. 12 (Sept. 27, 2017), adopted the analysis of McNamara v. Commissioner, 236 F.3d 410 (8th Cir. 2000), and comes 14 years after the IRS announced its non-acquiescence[i] with that key 8^th Circuit case.

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