Question on inherited farmland mid-year that is rented out

[JuneJS]

My spouse inherited farmland mid-year 2021 that was inherited jointly to him and his two siblings upon the death of their mother.  The farmland is rented out with a small portion in CRP.  None of the three siblings have ever or will ever operate it.  They would like to continue to rent it out at least for the foreseeable future.  My spouse's brother is currently acting as "manager" with power of attorney for the deceased.

The only dollars my spouse received in 2021 for this property is $177 from the USDA for a CRP payment.  He did not pay any expenses (taxes) on it in 2021 either.  My brother-in-law did receive one rent payment in 2021 after the death and it has been on hold, that is, my spouse has not received his share of the dollars yet.  The dollars will be distributed in 2022 (I imagine) and then we can "catch up" by reporting them on 2022 income taxes - as that is the actual year my spouse will receive them.

So, what version of Turbo Tax do I need to do my 2021 taxes when the only business income is $177 from the USDA for the CRP payment?  Thank you in advance!

[Anonymous_]

Was an estate opened or was the farmland in a trust?

The document granting your brother-in-law power of attorney (POA) is invalid since a POA terminates upon the death of the principal. 

If title has already vested in your spouse and his two siblings then, absent unusual circumstances, they can agree to split the income in any acceptable manner (typically, they would simply split the net income three ways). 

Rental income from real estate (including farmland rented for cash) is reported on Schedule E of your 1040.

[JuneJS]

Thanks for the reply.  No it is not a trust.  The intent was to split everything three ways, which is a method not uncommon in the state of the farm (South Dakota).  I think the brother-in-law was waiting to send any dollars to my spouse until after the 2021 taxes for the deceased are settled.  So, in my opinion, since my spouse did not receive any income from the renter in 2021, he should therefore not report it on 2021 tax return (with the exception of the CRP which we will report as part of 2021 tax return).  We will report renter dollars received as part of 2022 taxes as received.

Schedule E as you mention should be part of the Turbo Tax Deluxe so I should not have to buy the Home and Business Edition of Turbo Tax.

I appreciate comments.

[Anonymous_]

Yes, you can use TurboTax Deluxe for Schedule E if you are using a desktop version.

You might want to wait to file your personal income tax return to see if the brother-in-law files a return for the estate (Form 1041), in which case you might receive a K-1 with income to report. Of course, you can always simply ask your brother-in-law.