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New Member
posted Jun 5, 2019 11:21:58 PM

We sell avocados we farm every yr to a wholesaler. Prev. 3 years we lost money due to water costs, last year we profited. Do I file this income as farm or hobby income?

We receive no additional forms from the wholesaler, just the checks from them paying us for what avocados we sold them. We do not have a business name, we sell under our name and address (where the crop is located). We do all the work on the farm ourselves (harvesting, watering, upkeep).  For tax year 2018 (in question) we profited due to larger than usual crop,although this years crop for 2019 tax year is less and looking to be another loss after expenses.

Expenses we consider are watering costs and supplies (pipes for watering, fertilizer).  The farm is small but around 90 trees on 1.5 acres, so not just a few backyard trees.


The motive for the crop is always to make extra income, but the outcome is always dependent on other factors outside our control such as crop size, weather (causing the loss of crop due to wind or excessive heat).

Previous 3 tax years were filed under hobby income but with matching amount of expenses (since expenses cannot exceed income).

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2 Replies
New Member
Jun 5, 2019 11:22:00 PM

This sounds to me like a for-profit farming operation which should be filed under Schedule F. That being said, I would have also filed the prior years under Schedule F. So, you have missed out on taking some losses. 

I think you need to file Schedule F and strongly consider amending your prior year returns, so you can take the losses.

Level 15
Jun 5, 2019 11:22:00 PM

If the intention is just tp have fun and not make money then it might be a hobby.

But you answered your own question: "The motive for the crop is always to make extra income" so it is a business not a hobby.