Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Feb 18, 2022 2:26:46 PM

On a farm, can solar panel income go on a schedule F as farm income, or doesn't it need to be on a schedule C as non-farm income?

We have a farm and file a Schedule F.  We've recently installed solar panels that generate income.  Can the income from these go on the Schedule F as farm-income, or do they need to go on a Schedule C as non-farm-income?
In the similar situation, if we host weddings or photography on the farm (agro-tourism), is that also farm income or non-farm income?

0 1 130
1 Replies
Expert Alumni
Feb 18, 2022 2:57:42 PM

If the payments you receive for the solar production is a byproduct of you wanting to use soar panels, the income would be considered "Other Income" and reported on your 1040 Schedule 1 line 8z. 

In other words, what was your intend when you installed that panels? Was it to be in the business of producing energy, or simply to lower your costs or footprint? If the income is secondary, it is not business income. You don't pay Self-Employment tax on it, it won't be included in the QBI deduction, and you won't depreciate the panels. They are not business assets. 

 

Using the farm as a wedding venue is a separate business and should be treated that way. Report that income and expenses on a Schedule C. 

 

You'll need to allocate some expenses between the Schedule F and Schedule C. Try to do that in a logical way and keep records to show how you did that. Don't double dip, don't claim the same expense twice, once on the Schedule F and again on Schedule C. 

Try to make things easy, list farm assets on your Schedule F, even if you also use them in photo-shoots.