General Instructions(p1)

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. However, you can elect to treat a domestic LLC as a corporation. See Form 8832 for details on the election.

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.

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. You may also have to file an information return if you sold $5,000 or more of consumer products to a person on a buy-sell, deposit-commission, or other similar basis for resale. For details, see the 2010 General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G).

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.

If you entered into a reportable transaction in 2010, 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 Reportable Transaction Disclosure Statement in the instructions for Schedule C.

If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you each can be taxed as a partnership and file Form 1065, or you each can file Schedule F as a 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, line G, and the instructions for line E on this page.

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. On each line of your separate Schedule F, you must enter your share of the applicable income, deduction, or loss. Each of you must also file a separate Schedule SE 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. Enter "QJV election" in the search box and select "Benefits of Qualified Joint Ventures for Family Businesses."

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, the income and deductions are reported 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 Husband-Wife Farm on page F-1.

The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A change in your reporting position will be treated as a conversion of the entity.

If you had to make estimated tax payments for 2010 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 2009 or 2010 is at least two-thirds of your gross income.
• You file your 2010 tax return and pay the tax due by March 1, 2011.

For details, see chapter 15 of Pub. 225.