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 2009, see page 21 of the instructions for

Preproductive period expenses.

vested in this activity for which you are not

preproductive period expenses in 2009 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 (to in-

Nonrecourse loans used to finance the

dicate a negative amount) and enter

activity, to acquire property used in the ac-

“263A” in the space to the left of the 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 that begin

activity, or used to acquire the activity) that

If line 34f is a negative amount, subtract it

on page F-3.

are protected against loss by a guarantee,

from the total of lines 12 through 34e. Enter

stop-loss agreement, or other similar ar-

the result on line 35.

Paperwork Reduction Act Notice.

We ask

rangement (excluding casualty insurance

for the information on this form to carry out

and insurance against tort liability).

•

the Internal Revenue laws of the United

Amounts borrowed for use in the ac-

Line 36

States. You are required to give us the in-

tivity from a person who has an interest in

formation. We need it to ensure that you are

If you have a loss, the amount of loss you

the activity, other than as a creditor, or who

complying with these laws and to allow us

can deduct this year may be limited. Indi-

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

to figure and collect the right amount of

viduals, estates, and trusts must complete

person (other than you) having such an in-

tax.

line 37 before entering the loss on line 36.

terest.

You are not required to provide the in-

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

Figuring your deductible loss. If all

see the Instructions for Form 8582.

formation requested on a form that is sub-

amounts are at risk in this activity, check

ject to the Paperwork Reduction Act unless

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

Enter the net profit or deductible loss

the form displays a valid OMB control

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

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

number. Books or records relating to a form

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

ule SE, line 1a. Nonresident aliens — enter

or its instructions must be retained as long

need to complete Form 8582 to figure your

the net profit or deductible loss here and on

as their contents may become material in

allowable loss to enter on line 36. See the

Form 1040NR, line 19. Estates and

the administration of any Internal Revenue

Instructions for Form 8582.

trusts — enter the net profit or deductible

law. Generally, tax returns and return infor-

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

If you checked box 37b, first complete

mation are confidential, as required by sec-

ships — do not complete line 37; instead,

Form 6198 to determine the amount of your

tion 6103.

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

The time needed to complete and file

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

1065-B, line 7).

this form will vary depending on individual

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

circumstances. The estimated burden for

your loss may be further limited. See the

Community income.

If you and your

individual taxpayers filing this form is in-

Instructions for Form 8582. If your at-risk

spouse had community income and are fil-

cluded in the estimates shown in the in-

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

ing separate returns, see page SE-2 of the

structions for their individual income tax

Be sure to attach Form 6198 to your return.

instructions for Schedule SE before figur-

return. The estimated burden for all other

If you checked box 37b and you do not

ing self-employment tax.

taxpayers who file this form is approved

attach Form 6198, the processing of your

If you have a net

under OMB control numbers 1545-1975

Earned income credit.

tax return may be delayed.

profit on line 36, this amount is earned in-

and 1545-1976 and is shown below.

Any loss from this activity not allowed

come and may qualify you for the earned

for 2009 only because of the at-risk rules is

income credit if you meet certain condi-

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

treated as a deduction allocable to the activ-

tions. See the instructions for Form 1040,

ity in 2010.

Learning about the law or

lines 64a and 64b, for details.

For details, see Pub. 925 and the

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

Conservation Reserve Program (CRP)

Instructions for Form 6198.

payments.

If you received social security

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

retirement or disability benefits in addition

Copying, assembling, and

to CRP payments, the CRP payments are

sending the form to the IRS

40 min.

not subject to self-employment tax. You

Part III. Farm

will deduct these payments from your net

If you have comments concerning the

farm profit or loss on line 1b of Schedule

Income—Accrual

accuracy of these time estimates or sugges-

SE. Do not make any adjustment on Sched-

tions for making this form simpler, we

ule F.

Method

would be happy to hear from you. See the

instructions for the tax return with which

If you use an accrual method, report farm

this form is filed.

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 - 2009 Page 7

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