1099-G for Conservation Reserve Program Income

[sknewman4]

This income goes on a Schedule F.  Line B of Schedule F asks you for the Principal Agricultural Activity Code.  However, none of these codes fit for Conservation Reserve Program income.  TurboTax will not let you skip this step.  What do I put in Line B?

Thank you

[ThomasM125]

Since the income you describe is from the rental of your farm land, you should choose the I received agriculture payments on a 1099-MISC or 1099-G for my farm rental choice on the page that says Tell Is About Your Farm or Farm Rental Income. Then, you won't need to enter an activity code. 

[sknewman4]

I did.   It is not a rental, we own the farm and IRS specifically tells you this is not rental income.

On turbo tax you can click farm or farm rental.  I clicked farm.   It still asks for a code for Part B at top of schedule F and will not let you file return without it.  

[TeresaM]

The Principal Agricultural Activity Code is entered for the IRS to classify farms by their primary activity and is based on the North American Industry Classification System )NAICS).

Please use the code that best describes the primary farm activity. 

 

[sknewman4]

none fit.  There isn't a code for Conservation Reserve Program Income.  Your system will not let me leave it blank and file.  I can't be the only one with this issue.

[DoninGA]

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@sknewman4 wrote:

none fit.  There isn't a code for Conservation Reserve Program Income.  Your system will not let me leave it blank and file.  I can't be the only one with this issue.

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See if the information on the IRS website will provided assistance - https://www.irs.gov/businesses/small-businesses-self-employed/conservation-reserve-program-annual-re...

Where to report CRP payments on the federal tax return

Individuals must report all CRP payments on Schedule F, Profit or Loss From Farming, line 4a, Agricultural Program Payments. The amount of “annual rental payments” must be reported on line 4b, Taxable Amount, except to the extent it is for the permanent retirement of cropland base and allotment history (generally reportable on Form 4797, Sales of Business Property). The “annual rental payments” are not rentals from real estate and should not be reported on Form 4835, Farm Rental Income and Expenses, or Schedule E, Supplemental Income and Loss. The cost-sharing payments must be reported on Schedule F line 4b, Taxable Amount, unless they qualify for the cost-sharing exclusion.  For more information about this exclusion, see the section titled Cost-Sharing Exclusion (Improvements) in IRS Publication 225, Farmer’s Tax Guide.

[sknewman4]

NO. do you guys even read what the thread is?  I know it goes on schedule F.  I know its my owned farm income.  What I can't do is make Turbo Tax accept that and send taxes with no Agricultural code in B at the very beginning of the Schedule F.   You guys either can't read, don't take the time to or think we are all idiots.  

Why in your tax software can I not bypass the code that I don't have?  Or what code should I put there >

same questions, no answer just chatter.

[BrittanyS]

The Farm Code B does not refer to the type of income received.  It refers to the type of farm you run.  You will choose the code that describes your farming activity not the type of income your farm receives.  The screenshot previously provided by TeresaM is the list of codes provided from the IRS.  You should chose a code that is closest to the type of farm you have.  You cannot bypass the code as it is a requirement for the filing of a Schedule F form.  Listed below is a screenshot of the instructions from the IRS form:

@sknewman4 

[wadd1099G]

I have a grant for Natural Resources Conservation Service from the U.S. Dept of Agriculture.  I rent my farm acreage and filed the 1099 MISC for that last year on Schedule E.  I see no place to put the grant on Schedule E so I will have to use Schedule F, which I think means I will have to put the farm rental on Schedule F.  Is that a problem?  For the grant I received a 2023 1099-G in the amount of $32773.42.  I received and paid invoices for $27786.00 and $16995.00.  I did not pay the latter check until January of 2024, but I planned to use the accurral method and include it in 2023 so the grant income and checks were balanced.  Now in March of 2024 Natural Resources has sent another deposit in the amount of $23881.43, and I expect the expenses will equal that amount.  My question is can I still use the acccurral method even though the grant is covering a period of 2 years?  I am 84 years old and my husband is 87, and I don't want to leave unfinished business that will confuse my heirs.

[PatriciaV]

The grant should be reported on Schedule E as farm rental income on Form 1099-MISC. You can enter this under Rental Income topic for this schedule. Farm rental income is not reported on Schedule F.

It's best to report only the expenses you actually paid during the year covered by the tax return. This is required by the cash-basis method.

However, if you have reported on an accrual basis in the past, you may continue to do so. Under this method, you would have a prepaid rent balance until the two years are over.

Note that if you have reported on a cash basis in the past (most common), you would need to file IRS Form 3115, Application for Change in Accounting Method.