Definitions Farming & Fishing Income Averaging
Farming Business
A farming business is the trade or business of cultivating land or raising or harvesting any agricultural or horticultural commodity. A farming business includes:
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Operating a nursery or sod farm
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Raising or harvesting of trees bearing fruits, nuts, or other crops
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Raising ornamental trees (but not evergreen trees that are more than 6 years old when severed from the roots)
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Raising, shearing, feeding, caring for, training, and managing animals; and
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Leasing land to a tenant engaged in a farming business, but only if the lease payments are based on a share of the tenant’s production and not on a fixed amount.
A farming business does not include:
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Contract harvesting of an agricultural or horticultural commodity grown or raised by another, or
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Merely buying or reselling plants or animals grown or raised by another.
Fishing Business
Fishing business is defined in IRC Sec 1301(b)(4) as the conduct of commercial fishing as defined in section 3 of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1802. The Magnuson-Stevens Act defines commercial fishing as fishing in which the fish harvested are intended to or do enter commerce through sale, barter, or trade. (16 U.S.C. 1802(4)). Fishing is defined as the catching, taking, or harvesting of fish; the attempted catching, taking, or harvesting of fish; activities that reasonably can be expected to result in the catching, taking, or harvesting of fish; or any operations at sea in support of, or in preparation for, the catching, taking, or harvesting of fish. Fishing does not include any scientific research activity conducted by a scientific research vessel.
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Fish - Is defined as: finfish, mollusks, crustaceans, and all other forms of marine animal and plant life, other than marine mammals and birds.