Instructions For Schedule Se (Form 1040) - 2011 (Page 4 of 5) in pdf

tax purposes. For more information, see

basis and the job was not covered under a

production or management of the produc-

Pub. 555.

federal-state social security coverage

tion of farm products on the land. See chap-

agreement.

ter 12 of Pub. 225 for details. Report this

Share Farming

income on Form 4835. Use two Forms

9. Interest received in the course of any

4835 if you and your spouse made an elec-

You are considered self-employed if you

trade or business, such as interest on notes

tion to be taxed as a qualified joint venture.

produced crops or livestock on someone

or accounts receivable.

else’s land for a share of the crops or live-

6. Payments you receive from the Con-

10. Fees and other payments received by

stock produced (or a share of the proceeds

servation Reserve Program if you are re-

you for services as a director of a corpora-

from the sale of them). This applies even if

ceiving social security benefits for

tion.

you paid another person (an agent) to do the

retirement or disability. Deduct these pay-

11. Recapture amounts under sections

actual work or management for you. Report

ments on line 1b of Schedule SE.

179 and 280F that you included in gross

your net earnings for income tax purposes

7. Dividends on shares of stock and in-

income because the business use of the

on Schedule F (Form 1040) and for SE tax

property dropped to 50% or less. Do not

terest on bonds, notes, etc., if you did not

purposes on Schedule SE. See Pub. 225 for

include amounts you recaptured on the dis-

receive the income in the course of your

details.

position of property. See Form 4797.

trade or business as a dealer in stocks or

Other Income and Losses

securities.

12. Fees you received as a professional

fiduciary. This may also apply to fees paid

Included in Net Earnings

8. Gain or loss from:

to you as a nonprofessional fiduciary if the

From Self-Employment

a. The sale or exchange of a capital as-

fees relate to active participation in the op-

set;

eration of the estate’s business, or the man-

1. Rental income from a farm if, as land-

b. The sale, exchange, involuntary con-

agement of an estate that required extensive

lord, you materially participated in the pro-

version, or other disposition of property un-

management activities over a long period

duction or management of the production

less the property is stock in trade or other

of time.

of farm products on this land. This income

property that would be includible in inven-

is farm earnings. To determine whether you

13. Gain or loss from section 1256 con-

tory, or held primarily for sale to customers

materially participated in farm manage-

tracts or related property by an options or

in the ordinary course of the business; or

ment or production, do not consider the ac-

commodities dealer in the normal course of

tivities of any agent who acted for you. The

c. Certain transactions in timber, coal,

dealing in or trading section 1256 con-

material participation tests for landlords are

or domestic iron ore.

tracts.

explained in chapter 12 of Pub. 225.

9. Net operating losses from other years.

2. Cash or a payment-in-kind from the

Income and Losses Not

10. Termination payments you received

Department of Agriculture for participating

as a former insurance salesperson if all of

Included in Net Earnings

in a land diversion program.

the following conditions are met.

From Self-Employment

3. Payments for the use of rooms or

a. The payment was received from an

other space when you also provided sub-

insurance company because of services you

1. Salaries, fees, etc., subject to social

stantial services for the convenience of

security or Medicare tax that you received

performed as an insurance salesperson for

your tenants. Examples are hotel rooms,

for performing services as an employee, in-

the company.

boarding houses, tourist camps or homes,

cluding services performed as an employee

b. The payment was received after ter-

trailer parks, parking lots, warehouses, and

under the railroad retirement system. This

mination of your agreement to perform

storage garages. See chapter 5 of Pub. 334

includes services performed as a public of-

services for the company.

for more information.

ficial (except as a fee basis government em-

c. You did not perform any services for

4. Income from the retail sale of news-

ployee as explained in item 8 under Other

the company after termination and before

papers and magazines if you were age 18 or

Income and Losses Included in Net Earn-

the end of the year in which you received

older and kept the profits.

ings From Self-Employment , earlier.

the payment.

5. Income you receive as a direct seller.

2. Fees received for services performed

Newspaper carriers or distributors of any

d. You entered into a covenant not to

as a notary public. If you had no other in-

age are direct sellers if certain conditions

compete against the company for at least a

come subject to SE tax, enter “Ex-

apply. See chapter 5 of Pub. 334 for details.

1-year period beginning on the date of ter-

empt — Notary” on Form 1040, line 56. Do

mination.

6. Amounts received by current or for-

not file Schedule SE. However, if you had

mer self-employed insurance agents and

e. The amount of the payment depended

other net earnings of $400 or more subject

salespersons that are:

primarily on policies sold by or credited to

to SE tax, enter “Exempt — Notary” and

your account during the last year of the

the amount of your net profit as a notary

a. Paid after retirement but figured as a

public from Schedule C or Schedule C-EZ

agreement, or the extent to which those pol-

percentage of commissions received from

on the dotted line to the left of Schedule

icies remain in force for some period after

the paying company before retirement,

SE, line 3. Subtract that amount from the

termination, or both.

b. Renewal commissions, or

total of lines 1a, 1b, and 2, and enter the

f. The amount of the payment did not

c. Deferred commissions paid after re-

result on line 3.

depend to any extent on length of service or

tirement for sales made before retirement.

3. Income you received as a retired part-

overall earnings from services performed

However, certain termination payments re-

ner under a written partnership plan that

for the company (regardless of whether eli-

ceived by former insurance salespersons

provides for lifelong periodic retirement

gibility for the payment depended on length

are not included in net earnings from

payments if you had no other interest in the

of service).

self-employment (as explained in item 10

partnership and did not perform services

under Income and Losses Not Included in

for it during the year.

Statutory Employee Income

Net Earnings From Self-Employment ).

4. Income from real estate rentals if you

7. Income of certain crew members of

did not receive the income in the course of

If you were a statutory employee, do not

fishing vessels with crews of normally

a trade or business as a real estate dealer.

include the net profit or (loss) from Sched-

fewer than 10 people. See chapter 10 of

Report this income on Schedule E.

ule C, line 31 (or the net profit from Sched-

Pub. 334 for details.

ule C-EZ, line 3), on Short or Long

5. Income from farm rentals (including

Schedule SE, line 2. But if you file Long

8. Fees as a state or local government

rentals paid in crop shares) if, as landlord,

employee if you were paid only on a fee

you did not materially participate in the

Schedule SE, be sure to include statutory

SE-4

Instructions For Schedule Se (Form 1040) - 2011 Page 4

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