Instructions For Schedule F - Profit Or Loss From Farming

ment). If you did not receive a Form 1098,

certain requirements. A one-participant

taxes) of the first telephone line into your

enter the interest on line 23b.

plan is a plan that covers only you (or you

residence, even if you use it for your farm-

and your spouse).

ing business. But you can deduct expenses

If you paid more mortgage interest than

you paid for your farming business that are

is shown on Form 1098, see chapter 4 of

Form 5500.

File this form for a plan that

more than the cost of the base rate for the

Pub. 535 to find out if you can deduct the

does not meet the requirements for filing

first phone line. For example, if you had a

additional interest. If you can, include the

Form 5500-EZ.

second phone line, you can deduct the busi-

amount on line 23a. Attach a statement to

For details, see Pub. 560.

ness percentage of the charges for that line,

your return explaining the difference and

including the base rate charges.

enter “See attached” in the margin next to

line 23a.

Lines 26a and 26b

If you and at least one other person

Lines 34a Through 34f

(other than your spouse if you file a joint

If you rented or leased vehicles, machinery,

return) were liable for and paid interest on

or equipment, enter on line 26a the business

Include all ordinary and necessary farm ex-

the mortgage and the other person received

portion of your rental cost. But if you

penses not deducted elsewhere on Schedule

the Form 1098, include your share of the

leased a vehicle for a term of 30 days or

F, such as advertising, office supplies, etc.

interest on line 23b. Attach a statement to

more, you may have to reduce your deduc-

Do not include fines or penalties paid to a

your return showing the name and address

tion by an inclusion amount. See Leasing a

government for violating any law.

of the person who received the Form 1098.

Car in chapter 4 of Pub. 463 to figure this

In the margin next to line 23b, enter “See

At-risk loss deduction.

Any loss from this

amount.

attached.”

activity that was not allowed as a deduction

Enter on line 26b amounts paid to rent

last year because of the at-risk rules is

Do not deduct interest you prepaid in

or lease other property such as pasture or

treated as a deduction allocable to this ac-

2009 for later years; include only the part

farmland.

tivity in 2009. However, for the loss to be

that applies to 2009.

deductible, the amount “at risk” must be

increased.

Line 27

Line 24

See chapter 10 of Pub. 535.

Bad debts.

Enter amounts you paid for incidental re-

Enter the amounts you paid for farm labor.

If your farming

Business start-up costs.

pairs and maintenance of farm buildings,

Do not include amounts paid to yourself.

business began in 2009, you can elect to

machinery, and equipment that do not add

Reduce your deduction by the amounts

deduct up to $5,000 of certain business

to the property’s value or appreciably pro-

claimed on:

start-up costs. This limit is reduced (but not

long its life.

•

below zero) by the amount by which your

Form 5884, Work Opportunity Credit,

Do not deduct repairs or maintenance on

start-up costs exceed $50,000. Your re-

line 2;

your home.

•

maining start-up costs can be amortized

Form 5884-A, Credits for Affected

over a 180-month period, beginning with

Midwestern Disaster Area Employers, line

the month the farming business began. For

details, see chapters 4 and 7 of Pub. 225.

Line 31

•

Form 8844, Empowerment Zone and

For amortization that begins in 2009, you

Renewal Community Employment Credit,

You can deduct the following taxes on this

must complete and attach Form 4562.

line 2;

line.

•

Business use of your home.

You may be

Form 8845, Indian Employment

Real estate and personal property

able to deduct certain expenses for business

Credit, line 4; and

taxes on farm business assets.

•

use of your home, subject to limitations.

•

Form 8932, Credit for Employer Dif-

Social security and Medicare taxes

Use the worksheet in Pub. 587 to figure

ferential Wage Payments, line 2.

you paid to match what you are required to

your allowable deduction. Do not use Form

withhold from farm employees’ wages.

Include the cost of boarding farm labor

8829.

•

but not the value of any products they used

Federal unemployment tax.

•

from the farm. Include only what you paid

Forestation and reforestation costs.

Refor-

Federal highway use tax.

household help to care for farm laborers.

estation costs are generally capital expendi-

•

Contributions to state unemployment

tures. However, for each qualified timber

If you provided taxable fringe

insurance fund or disability benefit fund if

property, you can elect to expense up to

benefits to your employees,

they are considered taxes under state law.

$10,000 ($5,000 if married filing sepa-

such as personal use of a car, do

Do not deduct the following taxes on

rately) of qualifying reforestation costs

not include in farm labor the

paid or incurred in 2009.

this line.

amounts you depreciated or deducted else-

•

Federal income taxes, including your

You can elect to amortize the remaining

where.

self-employment tax. However, you can

costs over 84 months. For amortization that

deduct one-half of your self-employment

begins in 2009, you must complete and at-

tax on Form 1040, line 27.

tach Form 4562.

Line 25

•

Estate and gift taxes.

The amortization election does not ap-

•

Enter your deduction for contributions to

Taxes assessed for improvements,

ply to trusts and the expense election does

employee pension, profit-sharing, or annu-

such as paving and sewers.

not apply to estates and trusts. For details

•

ity plans. If the plan included you as a

Taxes on your home or personal use

on reforestation expenses, see chapters 4

self-employed person, enter contributions

property.

and 7 of Pub. 225.

made as an employer on your behalf on

•

State and local sales taxes on property

Form 1040, line 28 (or on Form 1040NR,

You can in-

Legal and professional fees.

purchased for use in your farming business.

line 27), not on Schedule F.

clude on this line fees charged by account-

Instead, treat these taxes as part of the cost

ants and attorneys that are ordinary and

Generally, you must file the applicable

of the property.

necessary expenses directly related to your

•

form listed next if you maintain a pension,

Other taxes not related to your farm-

farming business. Include fees for tax ad-

profit-sharing, or other funded-deferred

ing business.

vice and for the preparation of tax forms

compensation plan. The filing requirement

related to your farming business. Also in-

is not affected by whether or not the plan

clude expenses incurred in resolving as-

qualified under the Internal Revenue Code,

Line 32

serted tax deficiencies related to your

or whether or not you claim a deduction for

farming business.

the current tax year. There is a penalty for

Enter amounts you paid for gas, electricity,

failure to timely file these forms.

water, and other utilities for business use on

You can deduct the amount you

Tools.

File this form if you have a

the farm. Do not include personal utilities.

paid for tools that have a short life or cost a

Form 5500-EZ.

one-participant retirement plan that meets

You cannot deduct the base rate (including

small amount, such as shovels and rakes.

F-6

Instructions For Schedule F - Profit Or Loss From Farming - 2009 Page 6

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