Farm Income Expense - Rent or Lease

Farm Income Expense - Rent or Lease

When reporting farm rental income and expenses, taxpayers must determine whether to use Form 4835 or another form based on specific criteria. The IRS provides guidance on how to properly report income from farm rentals, especially when the tenant produces crops or livestock and the landlord does not materially participate in farm operations.

When to Use Form 4835

• Use Form 4835 - Farm Rental Income and Expenses if you are an individual who received rental income based on crops or livestock produced by the tenant.
• You must not have materially participated in the management or operation of the farm.
• This form is specifically designed for farm rental arrangements where income is tied to agricultural production.

Reporting Requirements

• Rental income from farm production or crop shares should be reported on Form 4835.
• Include all rental income and related expenses such as repairs, property taxes, and depreciation (if applicable).
• Ensure that the rental activity is not considered a trade or business, which would require reporting on Schedule C instead.

How to Add Form 4835 in OLT Software

Using Online Taxes (OLT) software, you can easily add Form 4835 to your tax return:

1. From within your tax return (Online), click on Federal in the left menu.
2. Under the Income section, click on the Show more button near Rental, Royalty, Partnership, S Corp, Trust.
3. Click on Add or Edit next to Farm Rental Income and Expenses - Form 4835.
4. Follow the on-screen instructions to enter your rental income and expenses.

Additional Resources

For more detailed guidance on farm income and expenses, refer to IRS publications that cover agricultural tax topics:

• Publication 225 (Farmer’s Tax Guide) – Provides comprehensive information on farm income, deductions, and credits.
• Publication 544 (Sales and Other Dispositions of Assets) – Useful for understanding basis and depreciation of farm property.

Source:

Publication 225 (Farmer’s Tax Guide)

Publication 544 (Sales and Other Dispositions of Assets)

Form 4835 (Farm Rental Income and Expenses)

Note: Always verify details with the most current Federal or State Department of Revenue Forms and Instructions.