Instructions For Schedule F - Profit Or Loss From Farming - 2008

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Department of the Treasury
Internal Revenue Service
2008 Instructions for Schedule F
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form 1040,
Profit or Loss
1040NR, 1041, 1065, or 1065-B.
Your farming activity may subject you to state and local taxes and other requirements
From Farming
such as business licenses and fees. Check with your state and local governments for more
information.
Additional information.
Pub. 225 has examples of filled-in forms and schedules, and lists
important dates that apply to farmers.
Increased expensing for qualified timber
Special depreciation allowance for
Section references are to the Internal
property in the GO Zone has expired.
The
qualified property (see Pub. 946).
Revenue Code unless otherwise noted.
increased expensing limit was available for
For a list of designated counties in fed-
reforestation expenditures paid or incurred
erally declared disaster areas go to
before January 1, 2008.
.
What’s New
Section 179 deduction increased.
For
What’s New—Disaster
property placed in service during a tax year
General Instructions
Areas
beginning in 2008, the limit for the section
179 deduction to expense certain deprecia-
ble business property has been increased to
Kansas and Midwestern Disaster
Other Schedules and Forms
$250,000. This limit will be reduced when
Areas
You May Have To File
the total cost of section 179 property placed
The following tax benefits are available for
in service during the tax year exceeds
Schedule E, Part I, to report rental in-
qualifying Schedule F filers in the Kansas
$800,000.
come from pastureland that is based on a
and Midwestern disaster areas.
flat charge. However, report on Schedule F,
Gulf Opportunity (GO) Zone property.
Employee retention credit for employ-
line 10, pasture income received from tak-
In addition to the increase discussed above,
ers.
ing care of someone else’s livestock. Also
the higher section 179 deduction has been
Deduction for qualified demolition
use Schedule E, Part I, to report farm rental
extended for qualified section 179 GO
and clean-up costs.
income and expenses of a trust or estate
Zone property when substantially all of the
based on crops or livestock produced by a
use is in specified portions of the GO Zone
Increased section 179 deduction for
and is placed in service in 2008. For the
tenant.
qualified property.
location of specified GO Zone portions, see
Schedule J to figure your tax by aver-
Special depreciation allowance for
Notice 2007-36.
aging your farm income over the previous 3
qualified property.
years. Doing so may reduce your tax.
Special depreciation allowance.
For quali-
For information about these benefits,
Schedule SE to pay self-employment
fying property acquired and placed in serv-
see:
tax on income from your farming business.
ice in 2008, you may be able to take a
depreciation deduction equal to 50% of the
Pub. 4492-A, Information for Taxpay-
Form 4562 to claim depreciation (in-
adjusted basis of the property. Qualifying
ers Affected by the May 4, 2007, Kansas
cluding the special allowance) on assets
property includes certain property with a
Storms and Tornadoes; and
placed in service in 2008, to claim amorti-
recovery period of 20 years or less, certain
zation that began in 2008, to make an elec-
Pub. 4492-B, Information for Af-
computer software, water utility property,
tion under section 179 to expense certain
fected Taxpayers in the Midwestern Disas-
or qualified leasehold improvements. For
property, or to report information on vehi-
ter Areas.
more information, see Pub. 946.
cles and other listed property.
Special instructions for taxpayers affected
Form 4684 to report a casualty or theft
Exclusion from self-employment tax for
by the May 4, 2007, Kansas storms and
gain or loss involving farm business prop-
certain Conservation Reserve Program
To claim a refund if you have
tornadoes.
erty, including purchased livestock held for
(CRP) payments.
Beginning in 2008,
already filed your 2007 tax return and have
draft, breeding, sport, or dairy purposes.
farmers receiving social security retirement
qualifying expenses for that year, file an
See Pub. 225 for more information on how
or disability benefits do not have to pay
amended return on Form 1040X, Amended
to report various farm losses, such as losses
self-employment tax on CRP payments.
U.S. Individual Income Tax Return, except
due to death of livestock or damage to
CRP payments are still subject to income
as otherwise provided in Notice 2008-67.
crops or other farm property.
tax.
This notice is found on page 307 of Internal
Form 4797 to report sales, exchanges,
Indian employment credit has been ex-
Revenue Bulletin 2008-32 at
or involuntary conversions (other than
The Indian employment credit has
tended.
.
from a casualty or theft) of certain farm
been extended for qualified wages paid to
property. Also use this form to report sales
Other Federally Declared Disaster
an employee through December 31, 2009.
of livestock held for draft, breeding, sport,
Areas
Special rules for contributing food
or dairy purposes.
The following tax benefits are available for
These rules
inventory have been extended.
Form 4835 to report rental income
qualifying Schedule F filers affected by
were due to expire at the end of 2007 but
based on crop or livestock shares produced
federally declared disasters occurring after
have been extended to contributions made
by a tenant if you are an individual who did
December 31, 2007, and before January 1,
in 2008 and 2009.
not materially participate in the manage-
2010.
ment or operation of a farm. This income is
Deduction for qualified clean-up costs in
Deduction for qualified demolition
not subject to self-employment tax. See
This deduction
the GO Zone has expired.
and clean-up costs (see Pub. 535).
Pub. 225.
was available for certain demolition and
clean-up costs paid or incurred before Janu-
Increased section 179 deduction for
Form 8824 to report like-kind ex-
changes.
ary 1, 2008.
qualified property (see Pub. 946).
F-1
Cat. No. 17152R

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