7 CFR §1400.202

1. (a)A person will be considered to be actively engaged in farming with respect to a farming operation if:
   1. (1)The person independently and separately makes a significant contribution to a farming operation of:
      1. (i)Capital, equipment, or land, or a combination of capital, equipment, or land and
      2. (ii)Active personal labor or active personal management, or a combination of active personal labor and active personal management;
   2. (2)Has a share of the profits or losses from the farming operation commensurate with the person's or legal entity's contributions to the operation; and
   3. (3)Makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the person's or legal entity's claimed share of the farming operation.
2. (b)If one spouse, or an estate of a deceased spouse, is determined to be actively engaged in farming as specified in paragraph (a) of this section, the other spouse is considered to have made a significant contribution, as specified in paragraph (a)(1)(ii) of this section, only to the same farming operation.
3. (c)If a farming operation is conducted by a person, and the capital, land, or equipment is contributed by the person, the capital, land, or equipment:
   1. (1)To meet the requirements of paragraph (a)(1)(i) of this section, must be contributed directly by the person and must not be acquired as a result of a loan made to, guaranteed, co-signed, or secured by any other person, joint operation, or legal entity that has an interest in the farming operation; and
   2. (2)To meet the requirements of paragraphs (a)(2) and (a)(3) of this section, and if acquired as a loan made to, guaranteed, co-signed, or secured by the persons, joint operations, or legal entities, the loan must:
      1. (i)Bear the prevailing interest rate and
      2. (ii)Have a repayment schedule considered reasonable and customary for the area.