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Returning Member

cash lease of farm grouond

Previously we had hired the work done on our farm in another state and declared both income and expenses related to the farm.  We also paid the required amounts  for self-employment taxes.  This year we are no longer actively farming the ground and have no farming expenses or income from farm production.  We are, instead, cash leasing the land to someone else to farm.   Are we still considered self-employed and required to pay  self-employment taxes on the rental amount?  It would seem no different than renting out a house or condo for rental income.  The rental amount for the land is entered on Form 4835 and flows to page 2 of Schedule E.  

3 Replies
Level 10

cash lease of farm grouond

You use SCH E, Part I, to report rental income from pastureland based on a flat charge.

You use Form 4835 to report rental income based on crop or livestock shares produced by a tenant.

Returning Member

cash lease of farm grouond

Thanks Martin.  Turbo Tax put the amount on the 4385 for 2020, probably because of the following:  In farming, you can choose to delay payment for a crop into the following year.  Although the land was cash leased in 2020, we had a deferred crop amount that went on to the schedule F (even though we were not actively farming the land in that year.)  Should I override TT and put the cash rent amount directly into Part 1 of Schedule E (the way it is it still ends up on Schedule E but on the back of the page in a different section.)  Or will it really make any difference?  I appreciate your response and help...thank you for such a speedy reply to my original question.

Level 10

cash lease of farm grouond

Big problems could result if you override TT and it won't make a difference if you do it the way you're proposing to do it. You could split it yourself and enter it that way.

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