General Instructions

Other Schedules and Forms You May Have To File

  • Schedule E (Form 1040), Part I, to report rental income from pastureland based on a flat charge. However, report on Schedule F (Form 1040), line 8, pasture income received from taking care of someone else's livestock. Also use Schedule E (Form 1040), Part I, to report farm rental income and expenses of a trust or estate based on crops or livestock produced by a tenant.

  • Schedule J (Form 1040) to figure your tax by averaging your farm income over the previous 3 years. Doing so may reduce your tax.

  • Schedule SE (Form 1040) to pay self-employment tax on income from your farming business.

  • Form 3800 to claim any general business credits.

  • Form 4562 to claim depreciation (including the special allowance) on assets placed in service in 2013, to claim amortization that began in 2013, to make an election under section 179 to expense certain property, or to report information on vehicles and other listed property.

  • Form 4684 to report a casualty or theft gain or loss involving farm business property, including purchased livestock held for draft, breeding, sport, or dairy purposes. See Pub. 225 for more information on how to report various farm losses, such as losses due to death of livestock or damage to crops or other farm property.

  • Form 4797 to report sales, exchanges, or involuntary conversions (other than from a casualty or theft) of certain farm property. Also use this form to report sales of livestock held for draft, breeding, sport, or dairy purposes.

  • Form 4835 to report rental income based on crop or livestock shares produced by a tenant if you did not materially participate in the management or operation of a farm. This income is not subject to self-employment tax. See Pub. 225.

  • Form 6198 to figure your allowable loss if you have a business loss and you have amounts invested in the business for which you are not at risk.

  • Form 8582 to figure your allowable loss from passive activities.

  • Form 8824 to report like-kind exchanges.

  • Form 8903 to take a deduction for income from domestic production activities.

Single-member limited liability company (LLC).    Generally, a single-member domestic LLC is not treated as a separate entity for federal income tax purposes. If you are the sole member of a domestic LLC engaged in the business of farming, file Schedule F (Form 1040). However, you can elect to treat a domestic LLC as a corporation. See Form 8832 for details on the election.

Heavy highway vehicle use tax.    If you use certain highway trucks, truck-trailers, tractor trailers, or buses in your farming business, you may have to pay a federal highway motor vehicle use tax. See the Instructions for Form 2290 to find out if you owe this tax and go to www.irs.gov/trucker for the latest developments.

Information returns.    You may have to file information returns for wages paid to employees, certain payments of fees and other nonemployee compensation, interest, rents, royalties, real estate transactions, annuities, and pensions. For details, see Line F, later, and the 2013 General Instructions for Certain Information Returns.

  If you received cash of more than $10,000 in one or more related transactions in your farming business, you may have to file Form 8300. For details, see Pub. 1544.

Reportable transaction disclosure statement.   If you entered into a reportable transaction in 2013, you must file Form 8886 to disclose information if your federal income tax liability is affected by your participation in the transaction. You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. For more information on reportable transactions, see the Instructions for Form 8886.

Farm Owned and Operated By Spouses

If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you can be taxed as a partnership and file Form 1065, or you each can file Schedule F (Form 1040) as a qualified joint venture.

Qualified Joint Venture

If you and your spouse each materially participate as the only members of a jointly owned and operated farm, and you file a joint return for the tax year, you can elect to be treated as a qualified joint venture instead of a partnership. This election in most cases will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. For an explanation of “material participation,” see the instructions for Schedule C (Form 1040), line G, and Line E, later, in these instructions.

Making the election.    To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the farming business between you and your spouse in accordance with your respective interests in the venture. Each of you must file a separate Schedule F (Form 1040). On each line of your separate Schedule F (Form 1040), you must enter your share of the applicable income, deduction, or loss. Each of you must also file a separate Schedule SE (Form 1040) to pay self-employment tax, as applicable.

  As long as you remain qualified, your election cannot be revoked without IRS consent.

  For more information on qualified joint ventures, go to IRS.gov and enter “qualified joint venture” in the search box.

Exception—Community Income

If you and your spouse wholly own an unincorporated farming business as community property under the community property laws of a state, foreign country, or U.S. possession, you can treat your wholly-owned, unincorporated business as a sole proprietorship, instead of a partnership. Any change in your reporting position will be treated as a conversion of the entity.

Report your income and deductions as follows.

  • If only one spouse participates in the business, all of the income from that business is the self-employment earnings of the spouse who carried on the business.

  • If both spouses participate, the income and deductions are allocated to the spouses based on their distributive shares.

  • If either or both you and your spouse are partners in a partnership, see Pub. 541.

  • If you and your spouse elected to treat the business as a qualifying joint venture, see Qualified Joint Venture, earlier, for how to report income and deductions.

The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Estimated Tax

If you had to make estimated tax payments for 2013, and you underpaid your estimated tax, you will not be charged a penalty if both of the following apply.

  • Your gross farming or fishing income for 2012 or 2013 is at least two-thirds of your gross income, and

  • You file your 2013 tax return and pay the tax due by March 3, 2014.

For details, see chapter 15 of Pub. 225.


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