To post a 1099-G for a grant to a farm in the Home & Business program go to.
- Business > Continue
- I'll choose what I work on.
- Select Farm Income & Expenses.
- Choose I have income from operating a Farm. Continue
- (This answers the source of income that your question referred to)
- Select your Farm
- Scroll to Farm Income
- Select Payments from Government Reported on 1099-G
- Any 1099-G income > Yes
- Continue the interview
Since this money will be taxed as income, you should not reduce the cost of improvements. You can expense, or amortize as appropriate.
You will still have to post the income to box 7. There is not an option for box 6, but the taxable outcome will be the same.
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