A family owned non-corporate entity may qualify for the FONCE exemption if it substantially all its activity is farming. "Farming" is defined as the growing of crops, nursery products, timber or fibers, such as cotton, for human or animal use or consumption; the keeping of horses, cattle, sheep, goats, chickens or other animals for human or animal use or consumption; the keeping of animals that produce products, such as milk, eggs, wool or hides for human or animal use or consumption; or the leasing of the land to be used for the purposes herein described.
Passive investment income includes gross receipts derived from farm property. Farm property includes all real property that is used, or held for use, in agriculture, including, but not limited to, growing crops, pastures, orchards, nurseries, plants, trees, timber, raising livestock or poultry or the production of raw dairy products, but does not include acreage used for recreational purposes by clubs including golf course playing hole improvements.
Reference: Tenn. Code Ann. §§ 1-3-105; 43-1-113; 67-4-2008(6)(A) ;67-4-2008(11)(B); 64-5-501.