Publication 225
taxmap/pubs/p225-005.htm#en_us_publink1000217705You may receive income from many sources. You must report the income from all the different sources on your tax return, unless it is excluded by law. Where you report the income on your tax return depends on its
source.
This chapter discusses farm income you report on Schedule F (Form 1040), Profit or Loss From Farming. For information on where to report other income, see the Instructions for Form 1040, U.S. Individual Income Tax
Return.
taxmap/pubs/p225-005.htm#en_us_publink1000217710The rules discussed in this chapter assume you use the cash method of accounting. Under the cash method, you generally include an item of income in gross income in the year you receive it. See
Cash Method in
chapter 2.
If you use an accrual method of accounting, different rules may apply to your situation. See
Accrual Method in
chapter 2.
Useful items
You may want to see:
Publication 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 908 Bankruptcy Tax Guide 925 Passive Activity and At-Risk Rules 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 982:
Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis
Adjustment) Sch E (Form 1040):
Supplemental
Income and Loss Sch J (Form 1040):
Income Averaging for Farmers and Fishermen 1099-G:
Certain Government Payments 1099-PATR:
Taxable Distributions
Received From Cooperatives 4797:
Sales of Business Property 4835:
Farm Rental Income and
Expenses See
chapter 16 for information about getting publications and forms.
Individuals, trusts, and partnerships report farm income on Schedule F (Form 1040), Profit or Loss From Farming. Use this schedule to figure the net profit or loss from regular farming
operations.
Income from farming reported on Schedule F includes amounts you receive from cultivating, operating, or managing a farm for gain or profit, either as owner or tenant. This includes income from operating a stock, dairy, poultry, fish, fruit, or truck farm and income from operating a plantation, ranch, range, or orchard. It also includes income from the sale of crop shares if you materially participate in producing the crop. See
Rents (Including Crop Shares), later.
Income received from operating a nursery, which specializes in growing ornamental plants, is considered to be income from farming.
Income reported on Schedule F does not include gains or losses from sales or other dispositions of the following farm
assets.
- Land.
- Depreciable farm equipment.
- Buildings and structures.
- Livestock held for draft, breeding, sport, or dairy purposes.
Gains and losses from most dispositions of farm assets are discussed in
chapters 8 and
9. Gains and losses from casualties, thefts, and condemnations are discussed in
chapter 11.
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