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Is farm rent earned income Form: What You Should Know
Income and expenses); or Schedule W-2 (Wagering on Lease Income and Expenses). Form 4835 may also be used in conjunction with Form 8814. This article covers all three tax forms. Farmland Rental Income Report I lease farmland to others, and they plant crops and raise livestock to sell to me. We also maintain a small commercial operation on the land. Farmland Rental Income from Crop/Heights Income and expenses from farmland grown by a landowner for rental for food, fuel, fertilizer, and other purposes is included when the farm income is shown on a Schedule F. Income and expenses from farmland not cultivated may be included when the farm income shown on Schedule F is smaller than the income and expenses from the land cultivated. The income from land not cultivated may exclude farm income from crops sold by the tenant. Interest on excess amounts from the farm Interest earnings on excess amounts from the farm can also be reported on Schedule F. To report this income, Form 8814(i) has three pages; in the upper right-hand corner there is a drop-down box. The first box is what's important — the last box determines the form you use. In the box labeled 'Amounts from leased farm income', enter the total income received from all fields. For instance, if you are leasing 2 fields to grow crops, enter 2×20,000. For the other fields, enter 1/3 of the total value. All fields will be included in one field entered here. See Appendix D for more information on how to enter the fields. As with the crops received, only one field is used. Farm revenue and expenses from the other fields are not taken into account. If more than one lease on a given parcel is being owned by a tenant at the same time, each will be included in one of the fields entered. It is important to remember, though, to use the Schedule F so that you don't overstate the income because the IRS will exclude such income from gross income. Interest earned on the excess farm rent is subject to the 2.9% tax on excess amount. If the tenant is also farming, the tenant's share of the total income or loss from the farm may be deducted on Schedule A, Itemized Deductions. How to Report As always, Form 4835 is the document most likely to receive a response from the farm rental business.
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