The striking increase in the use of trusts in recent years in owning farmland1 has focused attention on passive activity rules applicable to trusts particularly when the trust is used in farm and ranch estate (and business) planning if a business is carried on by the trust.2 A 2003 United States District Court case3 has cast a bright light on the fact that the Department of the Treasury has yet to issue regulations governing trusts in a setting where passive activity losses have been incurred.