How do I answer the Qualified Cooperative Payments question?

[gelibein1]

I have never had this question before and I am not sure how to answer. It wants the net income and wages from this business that are allocated to qualified cooperative payments. This is for my farm. How do I come up with the answer....put the total of my patronage payments from my 1099-PATR again?

[DianeC958]

Yes, the payments that are reported on your 1099-PATR are Cooperative payments.

To enter a 1099-PATR for farm or co-op dividends:

1. Open (continue) your return in TurboTax.
2. Inside TurboTax, search for 1099-PATR (be sure to include the dash) and then select the Jump to link in the search results.
3. Follow the instructions to enter info about your farm.
4. When you get to Your Farming Income and Expenses, you will enter your 1099-PATR info in Livestock, grain, produce, custom work, co-ops.

Instructions for Form 1099-PATR

[Plainsman2]

After we put in the 1099-PATR entries TurboTax comes back and says  "You told us you received $XXX of taxable cooperative distributions.  Then it asks "Net income allocable to qualified payment"  (fill in the blank).   How do we determine this number?

[DianeC958 · Accepted solution]

You determine this number by taking the amount you received on the 1099-PATR and dividing it by the total amount of revenue you received.  This will give you a percentage.  Take the net income and multiply the net income by this percentage.  This is the amount of net income that is allocable to the qualified payment.

For example you have $10,000 in income from 1099-PATR and $30,000 in other income.

Take $10,000/ $40,000 = .25.  If you net income is $20,000, take the $20,000 x .25 equals $5,000.  This is the amount of net income that is allocable to the qualified payment.

[RanSu]

I have no 1099-PATR form, because we have NO coop payments, yet I can't either leave this question blank or put in a zero. What is the fix or work around for electronic filing?

[ghamilton1]

When you say "You determine this number by taking the amount you received on the 1099-PATR and dividing it by the total amount of revenue you received", which revenue are you talking about? 

In my case, I received $32 on my 1099-PATR, which was a cotton gin dividend.  Is the revenue you are talking about just the total cotton income I received for that year, the total farm income or total income period?

Thanks,

Greg

[PatriciaV]

For Form 1099-PATR calculations, total revenue means total FARM income, and net income would be total farm revenue less total farm expenses.

@ghamilton1 

[ghamilton1]

Okay, thank you very much Patricia.