Do I use Schedule E for farm land rental and expenses or Form 4835 or both?

[IreneS · Accepted solution]

It depends on whether you receive cash payments or a share of the production as rent.  Use:

• Schedule E, if you are receiving fixed cash payments for rent; OR
• Form 4835, if you received a share of the production as rent.  

Fixed cash payments

Fixed cash payments count as rental income.  Enter the farm as a rental property, reported on Schedule E.   To do this, you need to be using the TurboTax Online Premier or Self-Employed editions, or one of the TurboTax desktop (CD/Download) products.

1. Click on Federal Taxes > Wages & Income  [In TT Self-Employed:  Personal > Personal Income]. 
2. Scroll down to the Rental Properties and Royalties section and click on the Start/Revisit box.  
3. On the Income from Rentals or Royalty Property You Own screen click Yes.
4. If you have already started adding information about your rental, you will come to the Rental and Royalty Summary screen.  Click on the Edit box next to the property.  Or you can click on the link Add Another Rental or Royalty.
5. If you haven't entered any rental or royalty information you will see the screen, Is This a Rental Property or Royalty?  be sure to mark the radio button next to Rental Property.
6. Continue through the screens, entering the requested information.

In TurboTax Self-Employed (online) or Home & Business (desktop):

1. Click on the Business tab > Continue > I'll choose what to work on
2. On the Let’s gather your business info screen, in the Rental Properties and Royalties section, click the Start/Update button.
3. Continue through the screens, entering the requested information.

Share of Production

If you received a share of the production as rent, then you would enter the farm as a "farm rental" in the Farm Income and Expenses section and it will be reported on Form 4835.  Please follow the steps listed below:

1. Click on Federal Taxes > Wages & Income.
2. In the Other Business Situations section, click on the Start/Revisit box next to Farm Income and Farm Rental.
3. On the Tell Us About Your Farm or Farm Rental Income screen, mark the box I received a share of the production from my farm rental and click Continue.
4. Continue through the screens, entering the requested information

In TurboTax Self-Employed (online) or Home & Business (desktop):

1. Click on the Business tab > Continue > I'll choose what to work on
2. On the Let’s gather your business info screen, in the Farm Income and Expenses section, click the Start/Update button next to Farm Rental Income and Expenses. 
3. On the screen, Tell Us About Your Farm or Farm Rental Income, mark the appropriate boxes concerning your farm rental. 
4. Continue through the screens, entering the requested information.

[Edited | 4/10/2020 |  10:56am PDT]

[cindy53]

Great answer...thanks...but now the information that I entered on Farm Rental doesn't want to delete when I changed it to a rental property entry. How do you delete an entry that won't go away???? 

[KarenJ2]

You can try deleting the form. 

If you are in the CD/Download version of TurboTax ,

1. Go to the Forms section 
2. Click on the Form you want to delete
3. Click on delete at the bottom of the form

In TurboTax Online

1. Once you are in your return, click on tax tools on the left hand side of the screen
2. Click on Tools right below tax tools
3. Review the list of forms and delete the appropriate one

Reenter your information.

[hydejohnm]

Thank you to Irene S. for providing enough information to answer my question.  I received fixed annual payments for farm land rental, so will report as simple rental property.   However, my understand is that the first part of Irene's answer below is misleading, which she clarifies in the next sentence.  This is because it's not whether you received cash payments or a share of the production, but whether it is a "fixed cash" payment that does not vary by the amount of production.  A share of the production can be in cash or actual ownership of share crop to sell.   If anybody thinks I'm wrong on this, PLEASE let us all know.

Irene's answer: "It depends on whether you receive cash payments or a share of the production as rent.  Use:
Schedule E, if you are receiving fixed cash payments for rent; OR Form 4835, if you received a share of the production as rent. " 

[ColeenD3]

She is correct. This is at the top of Form 4835:

Farm Rental Income and Expenses (Crop and Livestock Shares (Not Cash) Received by Landowner (or Sub-Lessor))

@hydejohnm

[jmillsp]

I am still a little confused as the program is asking me to fill out Schedule E. I have completed 4835 as I normally do. I do not take cash, it is on a share basis. Can I just delete the Schedule E? 

[AbrahamT]

If your Form 4835 properly fills in all the crop share income and the expenses accurately, then you know longer have any need for the Sch E. You can go ahead and delete Sch E.