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hschwertner
New Member

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

 
1 Best answer

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Vanessa
Level 3

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

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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1 Reply
Vanessa
Level 3

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

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"

View solution in original post

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