4835
OMB No. 1545-0074
Farm Rental Income and Expenses
Form
Department of the Treasury
(Crop and Livestock Shares (Not Cash) Received by Landowner (or Sub-Lessor))
(Income not subject to self-employment tax)
2007
Attachment
Internal Revenue Service Attach to Form 1040 or Form 1040NR. See instructions on back. Sequence No. 37
Name(s) shown on tax return Your social security number
Employer ID number (EIN), if any
A Did you actively participate in the operation of this farm during 2007 (see instructions)? Yes No
Part I Gross Farm Rental Income—Based on Production. Include amounts converted to cash or the equivalent.
1 Income from production of livestock, produce, grains, and other crops 1
2a Cooperative distributions (Form(s) 1099-PATR) 2a 2b Taxable amount 2b
3a Agricultural program payments (see instructions) 3a 3b Taxable amount 3b
4 Commodity Credit Corporation (CCC) loans (see instructions):
a CCC loans reported under election 4a
b CCC loans forfeited 4b 4c Taxable amount 4c
5 Crop insurance proceeds and federal crop disaster payments (see instructions):
a Amount received in 2007 5a 5b Taxable amount 5b
c If election to defer to 2008 is attached, check here 5d Amount deferred from 2006 5d
6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6
7 Gross farm rental income. Add amounts in the right column for lines 1 through 6. Enter the
total here and on Schedule E (Form 1040), line 42 7
Part II Expenses—Farm Rental Property. Do not include personal or living expenses.
8 Car and truck expenses (see 21 Pension and profit-sharing
Schedule F instructions). Also plans 21
attach Form 4562 8 22 Rent or lease:
9 Chemicals 9 a Vehicles, machinery,
10 Conservation expenses (see and equipment (see
instructions) 10 instructions) 22a
11 Custom hire (machine work) 11 b Other (land, animals, etc.) 22b
12 Depreciation and section 179 23 Repairs and maintenance 23
expense deduction not 24 Seeds and plants 24
claimed elsewhere 12 25 Storage and warehousing 25
13 Employee benefit programs 26 Supplies 26
other than on line 21 (see 27 Taxes 27
Schedule F instructions) 13 28 Utilities 28
14 Feed 14 29 Veterinary, breeding, and
15 Fertilizers and lime 15 medicine 29
16 Freight and trucking 16 30 Other expenses
17 Gasoline, fuel, and oil 17 (specify):
18 Insurance (other than health) 18 a 30a
19 Interest: b 30b
a Mortgage (paid to banks, etc.) 19a c 30c
b Other 19b d 30d
20 Labor hired (less employment e 30e
credits) (see Schedule F f 30f
instructions) 20 g 30g
31 Total expenses. Add lines 8 through 30g (see instructions) 31
32 Net farm rental income or (loss). Subtract line 31 from line 7. If the result is income, enter
it here and on Schedule E, line 40. If the result is a loss, you must go to line 33 32
33 If line 32 is a loss, check the box that describes your investment in this activity 33a All investment is at risk.
(see instructions) 33b Some investment is not at risk.
c You may have to complete Form 8582 to determine your deductible loss, regardless of
which box you checked (see instructions). If you checked box 33b, you must complete
Form 6198 before going to Form 8582. In either case, enter the deductible loss here and
on Schedule E, line 40 33c
For Paperwork Reduction Act Notice, see instructions on back. Cat. No. 13117W Form 4835 (2007)
Form 4835 (2007) Page 2
General Instructions Lines 3a and 3b. Enter on line 3a the total
agricultural program payments you received. On
Lines 19a and 19b. The tax treatment of interest
expense differs depending on its type. For
Purpose of form. If you were the landowner (or line 3b report the taxable amount. See the example, home mortgage interest and investment
sub-lessor) and did not materially participate (for instructions for Schedule F, lines 6a and 6b, on interest are treated differently. You must allocate
self-employment tax purposes) in the operation page F-3. (classify) your interest expense so it is deducted
or management of the farm, use Form 4835 to Lines 4a through 4c. Report the full amount of on the correct line of your tax return and it gets
report farm rental income based on crops or CCC loans forfeited, even if you reported the loan the right tax treatment. These rules could affect
livestock produced by the tenant. See chapter proceeds as income. See the instructions for how much interest you are allowed to deduct on
12 in Pub. 225, Farmer’s Tax Guide, for the Schedule F, lines 7a through 7c, on page F-3. Form 4835. See the instructions for Schedule F,
definition of material participation. lines 23a and 23b, on page F-5.
Lines 5a through 5d. In general, you must report
Use this form only if the activity was a rental crop insurance proceeds in the year you receive Line 22a. If you rented or leased vehicles,
activity for purposes of the passive activity loss them. Federal crop disaster payments are treated machinery, or equipment, enter on line 22a the
limitations. See the Instructions for Form 8582, as crop insurance proceeds. However, if you use business portion of your rental cost. But if you
Passive Activity Loss Limitations, for the the cash method of accounting and 2007 was the leased a vehicle for a term of 30 days or more,
definition of “rental activity.” year of damage, you can elect to include certain you may have to reduce your deduction by an
If you were a tenant, use Schedule F (Form proceeds in income for 2008. To do this, check inclusion amount. See Leasing a Car in
1040) to report farm income and expenses. the box on line 5c and attach a statement to your Pub. 463.
If you were a landowner (or sub-lessor), report return. See Pub. 225. Lines 30a through 30g. Enter expenses not
cash rent received for pasture or farmland based Generally, if you elect to defer any eligible crop listed on another line. See the instructions for
on a flat charge as income on Schedule E (Form insurance proceeds, you must defer all such crop Schedule F, lines 34a through 34f, on page F-6.
1040), Part I. Do not use this form. insurance proceeds (including federal crop If you are required to capitalize expenses, see
If you have net income on line 32, your tax disaster payments). How to report under Capitalizing costs of
may be less if you figure it using Schedule J For details on how to complete lines property.
(Form 1040). 5a through 5d, see the instructions for Schedule Line 31. If you have entered capitalized
Note. Form 4835 is for use by individuals only. F, lines 8a through 8d, on page F-3. preproductive expenses on line 30g, your total
Estates and trusts must file Schedule E, Part I, Line 6. Use this line to report income not shown expenses on line 31 will equal the total of lines 8
to report rental income and expenses from crop on lines 1 through 5d. See the instructions for through 30f reduced by the amount on line 30g.
and livestock shares. Partnerships and S Schedule F, line 10, on page F-3. Line 33. To determine your deductible loss, you
corporations must use Form 8825 for this may need to complete Form 8582. However, if
purpose. Part II. Expenses—Farm Rental you checked box 33b, you must complete Form
Additional information. See the instructions for Property 6198, At-Risk Limitations, before you complete
Schedule F and Pub. 225 for more information. Form 8582. See the instructions for Schedule F,
Capitalizing costs of property. If you line 37, on page F-7.
produced real or tangible personal property or
Do not complete Form 8582 if either of the
acquired property for resale, certain expenses
Specific Instructions may have to be included in inventory costs or
following applies.
Employer ID number. You need an employer capitalized. These expenses include the direct ● You meet all of the conditions listed under
identification number (EIN) only if you had a costs of the property and the share of any Exception for Certain Rental Real Estate
qualified retirement plan or were required to file indirect costs allocable to that property. Activities in the instructions for Schedule E on
an employment, excise, estate, trust, However, these rules generally do not apply to page E-2. Instead, enter your deductible loss on
partnership, or alcohol, tobacco, and firearms expenses of: line 33c and on Schedule E, line 40.
tax return. If you need an EIN, see the ● Producing any plant that has a preproductive ● You were a real estate professional (as
instructions for Form SS-4. period of 2 years or less, defined in the instructions for Schedule E on
Line A. Generally, you are considered to actively page E-2) and you materially participated in the
● Raising animals, or operation of this activity (under the passive loss
participate if you participated in making
● Replanting certain crops if they were lost or rules). See the Instructions for Form 8582 for the
management decisions or arranging for others to
damaged by reason of freezing temperatures, definition of material participation. Your loss is
provide services (such as repairs) in a significant
disease, drought, pests, or casualty. not subject to the passive activity loss
and bona fide sense. Management decisions that
are relevant in this context include approving But you may be able to currently deduct rather limitations. Instead, enter your deductible loss on
new tenants, deciding on rental terms, approving than capitalize the expenses of producing a plant line 33c and on Schedule E, line 40. Also,
capital or repair expenditures, and other similar with a preproductive period of more than 2 years. include the loss in the total for Schedule E,
decisions. You do not, however, actively See Election to deduct certain preproductive line 43.
participate if at any time during the year your period expenses in the instructions for Schedule F
interest (including your spouse’s interest) in the on page F-4. Paperwork Reduction Act Notice. We ask for
activity was less than 10% (by value) of all How to report. Do not reduce your expenses the information on this form to carry out the
interests in the activity. on lines 8 through 30f by the preproductive Internal Revenue laws of the United States. You
period expenses you must capitalize. Instead, are required to give us the information. We need
Part I. Gross Farm Rental enter the total amount capitalized in parentheses it to ensure that you are complying with these
Income—Based on Production on line 30g. On the line to the left of the line 30g laws and to allow us to figure and collect the
entry space, enter “263A.” right amount of tax.
Line 1. Report income you received from Line 10. Expenses you paid or incurred for soil
livestock, produce, grains, and other crops You are not required to provide the
and water conservation can be deducted only if information requested on a form that is subject
based on production. Under both the cash and they are consistent with a conservation plan
the accrual methods of reporting, you must to the Paperwork Reduction Act unless the form
approved by the Natural Resources Conservation displays a valid OMB control number. Books or
report livestock or crop share rentals received in Service of the Department of Agriculture for the
the year you convert them into money or its records relating to a form or its instructions must
area in which your land is located. If no plan be retained as long as their contents may
equivalent. exists, your expenses must be consistent with a become material in the administration of any
Lines 2a and 2b. Enter on line 2a your total soil conservation plan of a comparable state Internal Revenue law. Generally, tax returns and
distributions from cooperatives as shown on agency. See the instructions for Schedule F, line return information are confidential, as required
Form 1099-PATR, Taxable Distributions Received 14, on page F-4. by Internal Revenue Code section 6103.
From Cooperatives. On line 2b report the taxable Line 12. Enter your depreciation and
amount. See the instructions for Schedule F, lines The average time and expenses required to
section 179 expense deduction. For details, complete and file this form will vary depending
5a and 5b, on page F-2. including whether you must file Form 4562, on individual circumstances. For the estimated
Depreciation and Amortization, see the averages, see the instructions for your income
instructions for Schedule C (Form 1040), line 13, tax return.
on page C-4, and the instructions for Form 4562. If you have suggestions for making this form
simpler, we would be happy to hear from you.
See the instructions for your income tax return.