topic Farm rent and expenses as a passive activity. in Business & farm

Farm rent and expenses as a passive activity.

dlambert07291944 — Sat, 19 Oct 2019 18:37:13 GMT

I own a farm that I rent out as cash rent. I have some expense like insurance and taxes. My tenants will be sending me a 1099 for the rent they pay. Do I use schedule F or E. I am under the impression that sch F does not apply in my case. I do have some depreciation for drainage tile.

Thanks for any help.

Re: Farm rent and expenses as a passive activity.

Critter — Sat, 19 Oct 2019 19:36:45 GMT

Actually you use the form 4835 : https://www.irs.gov/forms-pubs/about-form-4835

Re: Farm rent and expenses as a passive activity.

Carl — Sun, 20 Oct 2019 02:00:41 GMT

I own a farm that I rent out as cash rent.

It doesn't matter if you rent it out (passive income) or actually farm it yourself to produce earned income. You still use SCH F. You'll note as you work it through the program that you will have to clearly identify if you rent it out (passive activity) or actually farm it (earned income). So in your case the farm income will be passive on SCH F.

Re: Farm rent and expenses as a passive activity.

Anonymous_ — Sun, 20 Oct 2019 02:18:56 GMT

Schedule F is used to figure the net profit or loss from regular farming operations.

Schedule E is used to report rental income from pasture or other farm real estate for a flat cash amount when no services are provided.

Form 4835 is used to report farm rental income based on crops or livestock produced by the tenant where the landowner (or sub-lessor) did not materially participate in the operation or management of the farm.