Roger P. Dudden and Marcia Dudden v. Commissioner of Internal Revenue Service

MAGILL, Circuit Judge.

Roger P. Dudden and Marcia Dudden (the Duddens), appellants and cash method taxpayers, appeal a tax court 1 ruling confirming the Commissioner of Internal Revenue’s (the Commissioner’s) assessment of a tax deficiency for the taxable years ending December 31, 1980 and December 31, 1981. We must decide whether the acquisition of replacement gilts, pursuant to a sow lease agreement between the Duddens and their closely held farm corporation, represented rental income which the Duddens should have recognized. We affirm the tax court ruling.

I

The Duddens, sole shareholders of…