Instructions For Schedule F - Profit Or Loss From Farming

Department of the Treasury

Internal Revenue Service

2009 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 more information and examples to help you complete

your farm tax return. It also lists important dates that apply to farmers.

Depreciation of machinery and equipment.

of livestock held for draft, breeding, sport,

Section references are to the Internal

The recovery period for any machinery or

or dairy purposes.

Revenue Code unless otherwise noted.

•

equipment used in a farming business

Form 4835 to report rental income

(other than any grain bin, cotton ginning

based on crop or livestock shares produced

asset, fence, or other land improvement) is

by a tenant if you are an individual who did

What’s New

5 years under the GDS and 10 years under

not materially participate in the manage-

the Alternative Depreciation System

ment or operation of a farm. This income is

The dol-

Section 179 deduction increased.

(ADS). The original use of the machinery

not subject to self-employment tax. See

lar limit for the section 179 deduction to

or equipment must begin with the taxpayer

Pub. 225.

expense certain depreciable business prop-

•

after December 31, 2008, and the machin-

Form 6198 to figure your allowable

erty is $250,000 for property placed in

ery or equipment must be placed in service

loss if you have a business loss and you

service during 2009. This limit will be re-

before January 1, 2010. For more informa-

have amounts invested in the business for

duced when the total cost of section 179

tion, see chapter 7 of Pub. 225.

which you are not at risk.

property placed in service during the tax

•

Form 8582 to figure your deductible

year exceeds $800,000. For more informa-

loss from passive activities.

tion, see Pub. 946.

•

Form 8824 to report like-kind ex-

Special depreciation allowance extended.

changes.

General Instructions

For qualifying property acquired after 2007

•

Form 8903 to take a deduction for in-

and placed in service in 2009, you may be

come from domestic production activities.

able to take a depreciation deduction equal

Other Schedules and Forms

to 50% of the adjusted basis of the prop-

Single-member limited liability company

You May Have To File

erty. Qualifying property includes certain

Generally, a single-member do-

(LLC).

•

property with a recovery period of 20 years

mestic LLC is not treated as a separate en-

Schedule E, Part I, to report rental in-

or less, certain computer software, water

tity for federal income tax purposes. If you

come from pastureland that is based on a

utility property, or qualified leasehold im-

are the sole member of a domestic LLC

flat charge. However, report on Schedule F,

provements. For more information, see

engaged in the business of farming, file

line 10, pasture income received from tak-

Pub. 946.

Schedule F. However, you can elect to treat

ing care of someone else’s livestock. Also

a domestic LLC as a corporation. See Form

use Schedule E, Part I, to report farm rental

Single-member limited liability companies

8832 for details on the election.

income and expenses of a trust or estate

(LLCs) with employees.

Single-member

based on crops or livestock produced by a

LLCs that are disregarded as entities sepa-

Heavy highway vehicle use tax.

If you use

rate from their owner for federal income

tenant.

certain highway trucks, truck-trailers, trac-

•

tax purposes are now required to file em-

Schedule J to figure your tax by aver-

tor trailers, or buses in your farming busi-

ployment tax returns (effective for wages

aging your farm income over the previous 3

ness, you may have to pay a federal

paid on or after January 1, 2009) using the

years. Doing so may reduce your tax.

highway motor vehicle use tax. See the In-

LLC’s name and employer identification

•

structions for Form 2290 to find out if you

Schedule SE to pay self-employment

number (EIN) rather than the LLC owner’s

owe this tax.

tax on income from your farming business.

name and EIN. This new requirement to

•

Form 3800 to claim any of the general

use the LLC’s name and EIN also went into

Information returns.

You may have to file

business credits.

effect for certain excise tax returns begin-

information returns for wages paid to em-

•

ployees, certain payments of fees and other

ning in 2008. Single-member LLCs not

Form 4562 to claim depreciation (in-

nonemployee compensation, interest, rents,

previously needing an EIN may now need

cluding the special allowance) on assets

royalties, real estate transactions, annuities,

to obtain an EIN for the payment and re-

placed in service in 2009, to claim amorti-

and pensions. You may also have to file an

porting of these taxes. For more informa-

zation that began in 2009, to make an elec-

information return if you sold $5,000 or

tion, see the Instructions for Form SS-4.

tion under section 179 to expense certain

more of consumer products to a person on a

property, or to report information on vehi-

Deduction for endangered species recovery

buy-sell, deposit-commission, or other sim-

cles and other listed property.

You can choose to deduct ex-

expenses.

ilar basis for resale. For details, see the

•

penses you paid for endangered species re-

Form 4684 to report a casualty or theft

2009 General Instructions for Forms 1099,

covery, if the expenses are consistent with a

gain or loss involving farm business prop-

1098, 3921, 3922, 5498, and W-2G.

recovery plan approved pursuant to the En-

erty, including purchased livestock held for

dangered Species Act of 1973 for the area

If you received cash of more than

draft, breeding, sport, or dairy purposes.

in which your land is located. See the in-

$10,000 in one or more related transactions

See Pub. 225 for more information on how

structions for line 14.

in your farming business, you may have to

to report various farm losses, such as losses

file Form 8300. For details, see Pub. 1544.

due to death of livestock or damage to

The recovery

Depreciation of race horses.

crops or other farm property.

period under the General Depreciation Sys-

Reportable transaction disclosure state-

•

Form 4797 to report sales, exchanges,

tem (GDS) is 3 years for all race horses

If you entered into a reportable

ment.

or involuntary conversions (other than

(regardless of age) placed in service after

transaction in 2009, you must file Form

from a casualty or theft) of certain farm

December 31, 2008. For more information,

8886 to disclose information if your federal

see chapter 7 of Pub. 225.

property. Also use this form to report sales

income tax liability is affected by your par-

F-1

Cat. No. 17152R

Instructions For Schedule F - Profit Or Loss From Farming - 2009

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