§ 1400.205 Trusts.

A trust will be considered to be actively engaged in farming with respect to a farming operation if: (a) The trust independently and separately makes a significant contribution to the farming operation of capital, equipment, or land, or a combination of capital, equipment, or land; (b) The income beneficiaries collectively make a significant contribution of active personal labor or active personal management, or a combination of active personal labor and active personal management to the farming operation. The combined interest of all the income beneficiaries providing active personal labor or active personal management, or a combination of active personal labor and active personal management, must be at least 50 percent; (c) The trust has a share of the profits or losses from the farming operation commensurate with the legal entity's contributions to the operation; (d) The trust makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the legal entity's claimed share of the farming operation; (e) For a farming operation conducted by a trust in which the capital, land, or equipment is contributed by the trust, the capital, land, or equipment: (1) To meet the requirements of paragraph (a) of this section, must be contributed directly by the trust and must not be acquired as a loan made to, guaranteed, co-signed, or secured by any person, legal entity, or qualified pass-through entity that has an interest in the farming operation, as defined in this part; and (2) To meet the requirements of paragraphs (c) and (d) of this section and if land, capital or equipment is acquired as a result of a loan made to, guaranteed, co-signed, or secured by the persons, legal entities, or qualified pass-through entities as defined, the loan must: (i) Bear the prevailing interest rate; and (ii) Have a repayment schedule considered reasonable and customary for the area. (f) The trust has provided a tax identification number of the trust unless the trust is a revocable trust and the grantor is the sole income beneficiary; and (g) The trust has provided a copy of the trust agreement to the county committee unless the trust is a revocable trust.