Instructions For Schedule F - Profit Or Loss From Farming

pledge part or all of your production to

Lines 5a and 5b

Part I. Farm

secure a CCC loan, you can elect to report

the loan proceeds as income in the year you

If you received distributions from a cooper-

Income—Cash

receive them, instead of the year you sell

ative in 2009, you should receive a Form

the crop. If you make this election (or made

1099-PATR. On line 5a, show your total

Method

the election in a prior year), report loan

distributions from cooperatives. This in-

proceeds you received in 2009 on line 7a.

cludes patronage dividends, nonpatronage

In Part I, show income received for items

Attach a statement to your return showing

distributions, per-unit retain allocations,

listed on lines 1 through 10. Generally, in-

the details of the loan(s).

and redemptions of nonqualified written

clude both the cash actually or construc-

notices of allocation and per-unit retain cer-

Forfeited CCC loans.

Include the full

tively received and the fair market value of

tificates.

amount forfeited on line 7b, even if you

goods or other property received for these

reported the loan proceeds as income. This

Show patronage dividends received in

items. Income is constructively received

amount may be reported to you on Form

cash and the dollar amount of qualified

when it is credited to your account or set

1099-A.

written notices of allocation. If you re-

aside for you to use. However, direct pay-

ceived property as patronage dividends, re-

If you did not elect to report the loan

ments or counter-cyclical payments re-

port the fair market value of the property as

proceeds as income, also include the for-

ceived under the Farm Security and Rural

income. Include cash advances received

feited amount on line 7c.

Investment Act of 2002 are required to be

from a marketing cooperative. If you re-

included in income only in the year of ac-

If you did elect to report the loan pro-

ceived per-unit retains in cash, show the

tual receipt.

ceeds as income, you generally will not

amount of cash. If you received qualified

have an entry on line 7c. But if the amount

per-unit retain certificates, show the stated

If you ran the farm yourself and re-

forfeited is different from your basis in the

dollar amount of the certificates.

ceived rents based on crop shares or farm

commodity, you may have an entry on

production, report these rents as income on

Do not include as income on line 5b

line 7c.

line 4.

patronage dividends from buying personal

See chapter 3 of Pub. 225 for details on

or family items, capital assets, or deprecia-

the tax consequences of electing to report

ble assets. Enter these amounts on line 5a

S a l e s

o f

l i v e s t o c k

b e c a u s e

o f

CCC loan proceeds as income or forfeiting

only. Because you do not report patronage

If you sold

weather-related conditions.

CCC loans.

dividends from these items as income, you

livestock because of drought, flood, or

must subtract the amount of the dividend

other weather-related conditions, you can

from the cost or other basis of these items.

elect to report the income from the sale in

Lines 8a Through 8d

the year after the year of sale if all of the

following apply.

In general, you must report crop insurance

•

Lines 6a and 6b

Your main business is farming.

proceeds in the year you receive them. Fed-

•

eral crop disaster payments are treated as

You can show that you sold the live-

Enter on line 6a the total of the following

crop insurance proceeds. However, if 2009

stock only because of weather-related con-

amounts.

was the year of damage, you can elect to

•

ditions.

Direct payments.

•

include certain proceeds in income for

•

Your area qualified for federal aid.

Counter-cyclical payments.

2010. To make this election, check the box

•

on line 8c and attach a statement to your

Price support payments.

See chapter 3 of Pub. 225 for details.

•

return. See chapter 3 of Pub. 225 for a

Market gain from the repayment of a

description of the proceeds for which an

secured Commodity Credit Corporation

Chapter 11 bankruptcy.

If you were a

election can be made and for what you must

(CCC) loan for less than the original loan

debtor in a chapter 11 bankruptcy case dur-

include in your statement.

amount.

ing 2009, see page 21 in the instructions for

•

Generally, if you elect to defer any eligi-

Diversion payments.

Form 1040 and page SE-2 of the instruc-

•

ble crop insurance proceeds, you must de-

tions for Schedule SE (Form 1040).

Cost-share payments (sight drafts).

fer all such crop insurance proceeds

•

Payments in the form of materials

(including federal crop disaster payments).

If you re-

Forms 1099 or CCC-1099-G.

(such as fertilizer or lime) or services (such

Enter on line 8a the total crop insurance

ceived Forms 1099 or CCC-1099-G show-

as grading or building dams).

proceeds you received in 2009, even if you

ing amounts paid to you, first determine if

elect to include them in income for 2010.

These amounts are government payments

the amounts are to be included with farm

you received and are usually reported to

income. Then, use the following chart to

Enter on line 8b the taxable amount of

you on Form 1099-G. You may also re-

determine where to report the income on

the proceeds you received in 2009. Do not

ceive Form CCC-1099-G from the Depart-

Schedule F. Include the Form 1099 or

include proceeds you elect to include in

ment of Agriculture showing the amounts

CCC-1099-G amounts in the total amount

income for 2010.

and types of payments made to you.

reported on that line.

Enter on line 8d the amount, if any, of

On line 6b, report only the taxable

crop insurance proceeds you received in

Where to

amount. For example, do not report the

2008 and elected to include in income for

Form

report

market gain shown on Form CCC-1099-G

2009.

on line 6b if you elected to report CCC loan

1099-PATR . . . . . . . . . . . .

Line 5a

proceeds as income in the year received

1099-A . . . . . . . . . . . . . . . .

Line 7b

(see Lines 7a Through 7c next). No gain

1099-MISC for crop

Line 10

results from redemption of the commodity

insurance . . . . . . . . . . . . . .

Line 8a

because you previously reported the CCC

Use this line to report income not shown on

1099-G or CCC-1099-G

loan proceeds as income. You are treated as

•

lines 1 through 9, such as the following.

for disaster payments . .

Line 8a

repurchasing the commodity for the

•

Illegal federal irrigation subsidies. See

for other agricultural

amount of the loan repayment. However, if

chapter 3 of Pub. 225.

program payments . . . .

Line 6a

you did not report the CCC loan proceeds

•

Bartering income.

under the election, you must report the mar-

•

ket gain on line 6b.

Income from cancellation of debt.

You may also receive Form 1099-MISC

Generally, if a debt is canceled or forgiven,

for other types of income. In this case, re-

you must include the canceled amount in

port it on whichever line best describes the

income. If a federal agency, financial insti-

Lines 7a Through 7c

income. For example, if you received a

tution, or credit union canceled or forgave a

Form 1099-MISC for custom farming

debt you owed of $600 or more, it should

Commodity Credit Corporation (CCC)

work, include this amount on line 9, “Cus-

Generally, you do not report CCC

send you a Form 1099-C, or similar state-

loans.

tom hire (machine work) income.”

loan proceeds as income. However, if you

ment, by February 1, 2010, showing the

F-3

Instructions For Schedule F - Profit Or Loss From Farming - 2009 Page 3

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