1099-G Agricultural Payment for Conservation Program - where to report it

[cbdouglass]

 I received form 1099-G for a conservation program agricultural payment. The "source" of the payment is from rented land, with income and expenses reported on Schedule E. Turbo Tax asks the source of the 1099-G ag payment and gives me the choices of farm (Schedule F), which I do not use, or farm rental (Form 4835), which I also do not use. The smart check results say form 4835 is "not ready; DO NOT FILE". How can I report my 1099-G income from my ag payment to the Schedule E for land rental?

[ColeenD3]

Box 7 is entered on Schedule F, per the instructions on the 1099-G.

Box 7. Shows your taxable Department of Agriculture payments. If the payer shown is anyone other than the Department of Agriculture, it means the payer has received a payment, as a nominee, that is taxable to you. This may represent the entire agricultural subsidy payment received on your behalf by the nominee, or it may be your pro rata share of the original payment. See Pub. 225 and the Schedule F (Form 1040) instructions for information about where to report this income.

[cbdouglass]

As I said in my original inquiry, I do not use schedule F because I do not operate a farm. I rent raw land to someone else and I report the income and expenses on Sch E as Turbo Tax recommends. The agricultural payment in 2020 was made to pay for conservation-related improvements to the land I rent under an approved government program. Are you saying I need to file a Schedule F just to report the income from the 1099-G, even though I do not operate a farm, in addition to the Schedule E for the land rental?

[ColeenD3]

I am quoting the IRS. From Pub 225:

Agricultural Program Payments

You must include in income most government payments, such as those for approved conservation practices, livestock indemnity payments, or livestock forage disaster payments whether you receive them in cash, materials, services, or commodity certificates. However, you can exclude from income some payments you receive under certain cost-sharing conservation programs. See Cost-Sharing Exclusion (Improvements), later.

Report the agricultural program payment on the appropriate line of Schedule F, Part I. Report the full amount even if you return a government check for cancellation, refund any of the payment you receive, or the government collects all or part of the payment from you by reducing the amount of some other payment or Commodity Credit Corporation (CCC) loan. However, you can deduct the amount you refund or return or that reduces some other payment or loan to you. Claim the deduction on Schedule F, Part II, for the year of repayment or reduction.