To determine whether the contribution of the conservation easement qualifies for the special rule of section 170(b)(1)(E)(iv), a fraction must be created, the numerator of which is the income derived from the trade or business of farming, and the denominator of which is the donor's gross income.2017 U.S. Tax Ct. LEXIS 39">*46 Seesec. 170(b)(1)(E)(v). The parties disagree as to the numerator amount. They agree as to the denominator amount.

We are mindful that although Browning Creek owned the property, it is the Rutkoske brothers who are treated as having contributed the conservation easement to Eastern Shore Land Conservancy, Inc. Browning Creek is treated as a partnership for Federal tax purposes and, as such, is not subject to the income tax imposed by chapter 1. Seesec. 701. Thus, pursuant to section 703(a), while the taxable income of a partnership is generally computed in the same manner as in the case of an individual, the deduction for charitable contributions provided in section 170 is not allowed to the partnership. Specifically, section 1.703-1(a)(2)(iv), Income Tax Regs., provides that "[e]ach partner is considered as having paid within his taxable year his distributive share of any contribution or gift, payment of which was actually made by the partnership within its taxable year ending within or with the partner's taxable year. This item shall be accounted for separately by the partners as provided in section 702(a)(4)." Section 702(a)(4) provides that in determining his/her income tax, each partner shall take into account separately his/her distributive share of the partnership's charitable contributions. Thus, in resolving2017 U.S. Tax Ct. LEXIS 39">*47 the problem at hand, we ignore Browning Creek and look at each Rutkoske brother to determine whether he is a qualified farmer.

Respondent's assertion with regard to each Rutkoske brother's numerator amount is straightforward: Section 2032A(e)(5) sets forth a list of specific activities, the revenues derived from which constitute farming income. Sale of land and the sale of the rights to develop land (i.e., the conservation easement bargain sale) are not activities listed in section 2032A(e)(5); therefore proceeds from the sale of land and the sale of the rights to develop land do not constitute income from the trade or business of farming for purposes of section 170(b)(1)(E)(v). Moreover, we are mindful that under respondent's interpretation, Felix Rutkoske's capital gain income of $877,057 arising from the sale of the property alone is greater than 50% of his gross income for 2009. Likewise, Mark and Karen Rutkoske's capital gain income of $877,058 arising from the sale of the property alone is greater than 50% of their gross income for 2009.

Petitioners have a different position. They assert that the income derived from the sale of the conservation easement as well as from the sale of the property constitutes income derived from the trade or2017 U.S. Tax Ct. LEXIS 39">*48 business of farming. Petitioners point out that section 170(b)(1)(E)(v) provides: "[T]he term 'qualified farmer or rancher' means a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is greater than 50 percent of the taxpayer's gross income for the taxable year." Petitioners maintain that the business of farming requires monetary capital and investment in tangible physical capital, including land, buildings and structures, and machinery and equipment. Hence they posit:

proceeds from a sale of an asset used in the business of farming constitute income from the business of farming. Accordingly, the proceeds of sale of a tractor used in the business of farming would be characterized as income from the business of farming. Proceeds from a sale of real estate used in the business of farming likewise generates income from the business of farming.

Petitioners state:

The phases of a life cycle in the business of farming are similar to the life cycle phases of other businesses; there exists a start period, a maturation or growth period, a transitional wind up period, and a termination/cessation. Continuation of business activity during the wind up period includes communications and correspondence with suppliers and customers; adjusting, altering, and prorating periodic monetary arrangements such as periodic business insurance arrangements; management of and disposition of seed inventory; management of and disposition of packing supplies inventory; management of and disposition of fuel inventory; continued compliance with tax filing and tax payment responsibilities; payment of bills and payment on outstanding debts. As illustrated in the below examples, proceeds from disposition of a business asset constitute business income, regardless whether such sale occurs during the maturation and growth phase of the business life cycle or whether such disposition occurs during2017 U.S. Tax Ct. LEXIS 39">*50 the transitional wind up phase.

If a farmer receives non-refundable money from a developer in exchange for the farmer granting the developer an option to buy the farmer's farmland exercisable for a six month period, and if at the end of the six months the developer fails to exercise the option, the income to the farmer on non exercise of the option should be characterized as income generated in the business of farming.

When Utility Company A seeks to acquire Utility Company B, and Utility Company A subsequently walks away from the potential acquisition and pays Utility Company B an acquisition cancellation fee, then Utility Company B's income from such transaction should be considered as income from the utility business.

If a farmer rents from a landlord under a long term lease, and the landlord seeks to break the lease in order to sell the land to a shopping center developer, the lease cancellation fee paid by the landlord to the farmer should be characterized as income from the business of farming.

Publicly traded business have disclosed in separate sections of their Profit & Loss Statements, income from discontinued operations. Such income from discontinued operations is still characterized2017 U.S. Tax Ct. LEXIS 39">*51 as income from that company's business, despite that such income is realized during the wind down period.

In resolving the parties' cross-motions, we look to the wording of the statute to construe its meaning. See Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102">447 U.S. 102, 447 U.S. 102">108, 100 S. Ct. 2051">100 S. Ct. 2051, 64 L. Ed. 2d 766">64 L. Ed. 2d 766 (1980); Frontier Chevrolet Co. v. Commissioner, 116 T.C. 289">116 T.C. 289, 116 T.C. 289">293 (2001), aff'd, 329 F.3d 1131">329 F.3d 1131 (9th Cir. 2003). When a statute is clear on its face, we require unequivocal evidence of legislative purpose before interpreting the statute to override the plain meaning of the words used therein. Frontier Chevrolet Co. v. Commissioner, 116 T.C. 289">116 T.C. 293.

Section 170(b)(1)(E)(v) is written in straightforward terms: A qualified farmer or rancher is a individual whose gross income from the trade or business of farming, which is defined as the activities listed in section 2032A(e)(5), is greater than 50% of his/her gross income for the year. Neither the disposal of property nor the disposal of the development rights attached thereto is an activity listed in section 2032A(e)(5).

We recognize that an individual engaged in the trade or business of farming most likely will engage in activities beyond those enumerated in the statute. The sale of used equipment by farmers is common. The acquisition and disposition of land is necessary because without land none of the section 2032A(e)(5) activities could be carried on. But we are not reviewing petitioners' activities in the context of determining their operation expense deductions2017 U.S. Tax Ct. LEXIS 39">*52 or any other provision of the Code that relates to a business' general operations.

Section 170(b)(1)(E) is a narrowly tailored provision intended to provide a tax benefit for a specific action, namely, the contribution of conservation easements by qualified farmers. We will not broaden the scope of activities listed in section 2032A(e)(5) beyond that ordinarily associated with them because our sole duty is to interpret the law as written by Congress.

We do not agree with petitioners' assertion that the disposal of property (and the development rights attached thereto) constitutes cultivating the soil, raising agricultural or horticultural commodities, the handling of such commodities, or tree farming. To cultivate means "[t]o prepare and improve (land), as by fertilizing or plowing, for raising crops". Webster's II New Riverside University Dictionary 335 (1988); to "raise" in the context of agriculture means "[t]o grow or breed"; id. at 972; and to "harvest" means "[t]he act or process of gathering a crop"; id. at 566. For the contribution of the conservation easement to qualify for the special rule of section 170(b)(1)(E)(iv), we look to the income derived from the sale of the agricultural and/or horticultural products created when engaging in these activities, not from the sale2017 U.S. Tax Ct. LEXIS 39">*53 of the land on which the agricultural and/or horticultural products are grown.

We acknowledge that the Rutkoske brothers are farmers and that they continued in the agricultural business after the property was sold. We further acknowledge that they used most of the proceeds derived from the sale of the property in their continuing farming operations; but being a farmer does not make one a "qualified farmer" for purposes of section 170(b)(1)(E)(iv)(I). The statute is unambiguous: A qualified farmer or rancher is defined as a taxpayer whose gross income from the trade or business of farming is greater than 50% of his/her gross income for the year. The statute speaks to income, not spending.

In any case, even if we were to agree with petitioners with respect to their interpretation of section 170(b)(1)(E), they still would not prevail. Although petitioners are treated as having directly contributed the property, section 702(b) provides that "[t]he character of any item of income, gain, loss, deduction, or credit included in a partner's distributive share under paragraphs (1) through (7) of subsection (a) [of sec. 702] shall be determined as if such item were realized directly from the source from which realized by the partnership, or incurred in the same manner2017 U.S. Tax Ct. LEXIS 39">*54 as incurred by the partnership." Browning Creek was not in the business of farming; it was in the business of leasing real estate. Thus, for Federal income tax purposes, the characterization of income from the sale of the property by Browning Creek (i.e., income from the sale of a real estate asset) flows through to the Rutkoske brothers, and in their hands the sale proceeds do not constitute income from the trade or business of farming.

We recognize that the statute makes it difficult for a farmer to receive a maximum charitable contribution deduction by disposing of a portion of property in a year in which he/she donates a conservation easement, especially in a State with high land values. But it is not our task to rewrite a statute.

To conclude, we will grant respondent's motion for partial summary judgment, filed September 2, 2016, and deny petitioners' motion for partial summary judgment, filed September 2, 2016. Because respondent disputes petitioners' valuation for the conservation easement, a trial with respect to the valuation likely will be necessary.

To reflect the foregoing,

An appropriate order will be issued.