Instructions For Schedule F - Profit Or Loss From Farming

Travel, meals, and entertainment.

Gener-

vested in the activity for which you are not

this method. See Pub. 225 for exceptions,

ally, you can deduct expenses for farm

at risk, you must complete Form 6198 to

inventory methods, how to change methods

business travel and 50% of your business

figure your allowable loss. The at-risk rules

of accounting, and rules that require certain

meals and entertainment. But there are ex-

generally limit the amount of loss (includ-

costs to be capitalized or included in inven-

ceptions and limitations. See the instruc-

ing loss on the disposition of assets) you

tory.

tions for Schedule C, lines 24a and 24b,

can claim to the amount you could actually

Chapter 11 bankruptcy.

If you were a

that begin on page C-6.

lose in the activity.

debtor in a chapter 11 bankruptcy case dur-

Check box 37b if you have amounts in-

If you had

ing 2008, see page 20 of the instructions for

Preproductive period expenses.

vested in this activity for which you are not

preproductive period expenses in 2008 that

Form 1040 and page SE-2 of the instruc-

at risk, such as the following.

you are capitalizing, enter the total of these

tions for Schedule SE (Form 1040).

•

expenses in parentheses on line 34f and

Nonrecourse loans used to finance the

enter “263A” in the space to the left of the

activity, to acquire property used in the ac-

total.

tivity, or to acquire the activity that are not

Lines 39a Through 41c

secured by your own property (other than

For details, see page F-4, Capitalizing

property used in the activity). However,

See the instructions for lines 5a through 7c

costs of property, and Uniform Capitaliza-

there is an exception for certain nonre-

on page F-3.

tion Rules in chapter 6 of Pub. 225.

course financing borrowed by you in con-

nection with holding real property.

•

Cash, property, or borrowed amounts

Line 44

Line 35

used in the activity (or contributed to the

See the instructions for line 10 on page F-4.

activity, or used to acquire the activity) that

If line 34f is a negative amount, subtract it

are protected against loss by a guarantee,

from the total of lines 12 through 34e. Enter

We ask

Paperwork Reduction Act Notice.

stop-loss agreement, or other similar ar-

the result on line 35.

for the information on this form to carry out

rangement (excluding casualty insurance

the Internal Revenue laws of the United

and insurance against tort liability).

•

States. You are required to give us the in-

Amounts borrowed for use in the ac-

Line 36

formation. We need it to ensure that you are

tivity from a person who has an interest in

complying with these laws and to allow us

If you have a loss, the amount of loss you

the activity, other than as a creditor, or who

to figure and collect the right amount of

can deduct this year may be limited. Indi-

is related under section 465(b)(3)(C) to a

tax.

viduals, estates, and trusts must complete

person (other than you) having such an in-

You are not required to provide the in-

line 37 before entering the loss on line 36.

terest.

formation requested on a form that is sub-

If you checked the “No” box on line E, also

Figuring your deductible loss. If all

see the Instructions for Form 8582.

ject to the Paperwork Reduction Act unless

amounts are at risk in this activity, check

the form displays a valid OMB control

box 37a. If you checked the “Yes” box on

Enter the net profit or deductible loss

number. Books or records relating to a form

line E, enter your loss on line 36. But if you

here and on Form 1040, line 18, and Sched-

or its instructions must be retained as long

checked the “No” box on line E, you may

ule SE, line 1a. Nonresident aliens — enter

as their contents may become material in

need to complete Form 8582 to figure your

the net profit or deductible loss here and on

the administration of any Internal Revenue

allowable loss to enter on line 36. See the

Form 1040NR, line 19. Estates and

law. Generally, tax returns and return infor-

Instructions for Form 8582.

trusts — enter the net profit or deductible

mation are confidential, as required by sec-

loss here and on Form 1041, line 6. Partner-

If you checked box 37b, first complete

tion 6103.

ships — do not complete line 37; instead,

Form 6198 to determine the amount of your

The time needed to complete and file

stop here and enter the profit or loss on this

deductible loss. If you checked the “Yes”

line and on Form 1065, line 5 (or Form

this form will vary depending on individual

box on line E, enter that amount on line 36.

1065-B, line 7).

circumstances. The estimated burden for

But if you checked the “No” box on line E,

individual taxpayers filing this form is in-

your loss may be further limited. See the

Community income.

If you and your

cluded in the estimates shown in the in-

Instructions for Form 8582. If your at-risk

spouse had community income and are fil-

structions for their individual income tax

amount is zero or less, enter -0- on line 36.

ing separate returns, see page SE-2 of the

return. The estimated burden for all other

Be sure to attach Form 6198 to your return.

instructions for Schedule SE before figur-

taxpayers who file this form is approved

If you checked box 37b and you do not

ing self-employment tax.

under OMB control numbers 1545-1975

attach Form 6198, the processing of your

If you have a net

and 1545-1976 and is shown below.

Earned income credit.

tax return may be delayed.

profit on line 36, this amount is earned in-

Any loss from this activity not allowed

come and may qualify you for the earned

Recordkeeping . . . . . . . . . 7 hr., 5 min.

for 2008 only because of the at-risk rules is

income credit if you meet certain condi-

treated as a deduction allocable to the activ-

Learning about the law or

tions. See the instructions for Form 1040,

ity in 2009.

lines 64a and 64b, for details.

the form . . . . . . . . . . . . . . 1 hr., 2 min.

For details, see Pub. 925 and the

Conservation Reserve Program (CRP)

Preparing the form . . . . . . 2 hr., 52 min.

Instructions for Form 6198.

payments.

If you received social security

Copying, assembling, and

retirement or disability benefits in addition

sending the form to the IRS

40 min.

to CRP payments, the CRP payments are

not subject to self-employment tax. You

Part III. Farm

If you have comments concerning the

will deduct these payments from your net

accuracy of these time estimates or sugges-

farm profit or loss on line 1b of Schedule

Income—Accrual

tions for making this form simpler, we

SE. Do not make any adjustment on Sched-

would be happy to hear from you. See the

ule F.

Method

instructions for the tax return with which

this form is filed.

If you use an accrual method, report farm

Line 37

income when you earn it, not when you

receive it. Generally, you must include ani-

At-risk rules.

Generally, if you have a loss

mals and crops in your inventory if you use

from a farming activity and amounts in-

F-7

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Instructions For Schedule F - Profit Or Loss From Farming - 2008 Page 7

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