1400.202—Persons.
(a)
A person will be considered to be actively engaged in farming with respect to a farming operation if:
(1)
The person independently and separately makes a significant contribution to a farming operation of:
(ii)
Active personal labor or active personal management, or a combination of active personal labor and active personal management;
(2)
Has a share of the profits or losses from the farming operation commensurate with the person's or legal entity's contributions to the operation; and
(3)
Makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the person's or legal entity's claimed share of the farming operation.
(b)
If one spouse, or an estate of a deceased spouse, is determined to be actively engaged in farming as specified in paragraph (a) of this section, the other spouse is considered to have made a significant contribution, as specified in paragraph (a)(1)(ii) of this section, only to the same farming operation.
(c)
If a farming operation is conducted by a person, and the capital, land, or equipment is contributed by the person, such capital, land, or equipment:
(1)
To meet the requirements of paragraph (a)(1)(i) of this section, must be contributed directly by the person and must not be acquired as a result of a loan made to, guaranteed, co-signed, or secured by:
(i)
Any other person, joint operation, or legal entity that has an interest in such farming operation;
(ii)
Such person, joint operation, or legal entity by any other person, joint operation, or legal entity that has an interest in such farming operation or
(iii)
Any other person, joint operation, or legal entity in whose farming operation such person, joint operation, or legal entity has an interest; and
(2)
To meet the requirements of paragraphs (a)(2) and (a)(3) of this section, and if acquired as a loan made to, guaranteed, co-signed, or secured by the persons, joint operations, or legal entities, the loan must: