If I have farm rental income on Form 4835, can I use income averaging?

hschwertner · ‎June 4, 2019

Vanessa · ‎June 4, 2019

Possibly. If you're farm rental meets the following definition then you would be "considered to be engaged in Leasing land to a tenant engaged in a farming business, but only if the lease payments are

(a) based on a share of the tenant's production (not a fixed amount), and
(b) determined under a written agreement entered into before the tenant begins significant activities on the land."

https://www.irs.gov/pub/irs-pdf/i1040sj.pdf

If you meet the above qualifications then yes you would be able to use income averaging. If not, then you cannot use it.

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View solution in original post

Vanessa · ‎June 4, 2019

Possibly. If you're farm rental meets the following definition then you would be "considered to be engaged in Leasing land to a tenant engaged in a farming business, but only if the lease payments are

(a) based on a share of the tenant's production (not a fixed amount), and
(b) determined under a written agreement entered into before the tenant begins significant activities on the land."

https://www.irs.gov/pub/irs-pdf/i1040sj.pdf

If you meet the above qualifications then yes you would be able to use income averaging. If not, then you cannot use it.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"