Draft: Hobby Farming “This tax rule outlines how income from agricultural land is treated under the law. If the land is sold, exchanged or disposed of, the gain from that land is subject to this special tax section. Whenever the excess deduction account earns something, that gain is recognized as ordinary income. Gain from the sale, exchange, or involuntary conversion of reclaimed farm property also exceeds the adjusted basis and is considered ordinary income. At the end of the tax year, the amount of the excess deduction previously indicated will be deducted from the amount of ordinary income resulting from the deposition of the land. Failure to enforce this law includes monetary loss in the event of an involuntary sale, exchange, or conversion of property. Thomas Jefferson once said, “The tillers of the earth are the most valuable citizens.” America has always been defined by the success or failure of its tillers of the land, whether local farmers in Tennessee or large-scale producers in the Midwest. Most farms can also be the same size, from a few acres to huge acreages capable of producing most of what a community will consume. Between family-owned and larger farms, the farm that falls between these two sizes would be a hobby farm. Hobby farms share some characteristics of both sizes of farms, but do not. Depending on the type of owner, a hobby farm may have as much funding as a large agricultural center, but is owned and operated by only a few people who have a single goal, such as owning a stable of racehorses. The other type of hobby farm that may exist is a regular farm that grows produce or raises livestock, but whose owner's primary income does not come from farming or who works most of the time off a farm. The main aim of this work is to confirm the different tax status of these two agricultural activities