SSR 61-29. JOINT OWNERSHIP OF FARM

In 1939 S joined with her brother, B, in the purchase of certain farm

land. At the time of the purchaseS had been living and working in the city

for several years. In 1942, S left the city to live on the farm and to

keep house for her brother and her father who was ill. In the meantime, B,

an experienced farmer, had operated the farm on the land purchased by him

and S, and has continued to operate it through the years. B has always

been considered the sole operator of the farm by those with whom he dealt.

All contracts for the sale of the farm products have always been in B's

name, and all receipts from the sales are deposited in a bank account

which is in B's name only. Since coming to live on the farm, S has taken

no part in the operation or management of the farm business but has

occupied herself exclusively with housework, and B has given her money as

she has needed it for herself and the house.

The question is whether S is a partner of B for the purpose of

determining whether income derived from the operation of the farm may be

included in computing her net earnings from self-employment for social

security purposes.

Section 211(a) of the Social Security Act provides, in pertinent part,

for the inclusion of the distributive share of income from a trade or

business carried on by a partnership of which an individual is a member in

computing the net earnings from self-employment of such individual.

Section 211(d) of the Act provides that the terms "partnership" and

"partner" shall have the same meaning as when used in subchapter K of

chapter 1 of the Internal Revenue Code of 1954.

inclusion of the distributive share of income from a trade or

business carried on by a partnership of which an individual is a member in

computing the net earnings from self-employment of such individual.

Section 211(d) of the Act provides that the terms "partnership" and

"partner" shall have the same meaning as when used in subchapter K of

chapter 1 of the Internal Revenue Code of 1954.

In determining whether a partnership existed within the meaning of

section 211(d) of the Act, the question is whether the partners actually

intended to join together for the purpose of carrying on the business and

sharing in the profits and losses or both. Their intention in this respect

is a question of fact, to be determined from their agreement, their

conduct, their statements, the testimony of disinterested persons, the

relationship of the parties, their respective abilities and capital

contributions, the actual control of income and the purposes for which it

is used, and any other facts throwing light on their true intent.

The fact that jointly-owned assets are used in carrying on a business

activity will not of itself establish a partnership. There must be a

co-ownership of the business, as distinguished from the assets. Ownership

of property by tenants-in-common does not make such tenants partners in

the absence of an intention to become partners.

In the present case, the ownership interests of S and B in the farm

property were distinct from their interests in the farm business conducted

on the property. There was never any intent on the part of S and B to join

together in conducting the farm business. B managed all phases of the

business, made all decisions regarding it,a nd received and controlled the

income derived from the business. Although S had joined with him in

purchasing the land, she took no part in the operation of the farm

business, but concerned herself exclusively with the housework.

ever any intent on the part of S and B to join

together in conducting the farm business. B managed all phases of the

business, made all decisions regarding it,a nd received and controlled the

income derived from the business. Although S had joined with him in

purchasing the land, she took no part in the operation of the farm

business, but concerned herself exclusively with the housework.

Accordingly, it is held that S was not a partner of B in the

operation of the farm business and therefore no part of the income from

the business is includible in computing her net earnings from

self-employment for social security purposes.