Fillable Pa Schedule F (Form Pa-40 F) - Farm Income And Expenses printable pdf download

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PA-40 F (08–15) (FI)

PA Schedule F

PA DEPARTMENT OF REVENUE

Farm Income and Expenses

Overview

Form 4835. Report rental income from farm production or crop shares

whether or not you materially participate in the production of that

Use PA Schedule F to report income or loss from a business you operate

income as rental income on PA Schedule E. Pennsylvania does not have

as a farm. The following definitions may be helpful in determining if you

"materially participating" rules. An owner may deduct all losses in the

should file a PA Schedule C or PA Schedule F:

taxable year realized. Only report on PA Schedule F the income,

Farming—The following activities, when engaged in as a regular business:

expenses and profit or loss from the operation of your farm enterprise.

(i) Agriculture. The business of producing food products or other useful

or valuable growths or crops by tilling and cultivating the soil, and by

Form 8824. Do not report like-kind exchanges on PA Schedule F.

breeding, raising and feeding cattle, livestock, bees, poultry or other

Pennsylvania laws and regulations do not recognize like-kind

animals that produce a food product or are themselves a food product.

exchanges. Report any gain or loss from any sale, exchange or disposition

For example, the commercial raising of mushrooms is farming, but

on Line 11 of PA Schedule F, if the transaction was a normal business

gardening and similar noncommercial activities are not farming. The

transaction. Report any gain or loss from other dispositions (nonbusiness)

following are not included within the definition of agriculture:

on PA Schedule D.

(A) The breeding or raising of dogs, cats and other pets; or game

If you own or operate more than one farm or farming operation, you

animals, birds, fish or other animals intended for use in sporting

must submit a separate PA Schedule F for each operation.

or recreational activities such as, but not limited to, hunting,

fishing, show competition and racing.

Other Pennsylvania and federal income tax differences.

(B) The operation of stockyards or slaughterhouses.

PA income from farming generally differs from the income determined

for federal income tax purposes. Further, Pennsylvania will no longer

(ii) Horticulture. The business of producing vegetables, vegetable

accept a PA Schedule C-F Reconciliation for the purpose of adjusting the

plants, fruits and nursery stock, including the operation of commercial

federal farm income to PA farm income. Therefore, the items which

vegetable greenhouses and nurseries. Horticulture does not include the

were previously included as additions to PA income or expenses on the

business of servicing plants owned by other persons.

PA Schedule C-F Reconciliation should be included with the specific line

(iii) Floriculture. The business of producing flowers and decorative or

of income or expense on PA Schedule F. In addition, those items which

shade trees, plants and shrubs in the field, nursery or greenhouse. The

Pennsylvania does not require be reported as income or does not allow

raising of trees as timber or lumbering and logging or sawmill operations

as expense in determining net farm income, which are allowed in the

are not included in the definition of floriculture.

determination of net federal farm income, should not be included in the

specific farm income or expenses on PA Schedule F.

(iv) Dairy farming. The business of breeding, feeding and raising cattle

and other milk producing animals, and the production of feed for them

Examples of items that Pennsylvania requires as additions to income

by the owner of the animals. This doesn’t include operations such as

include: any advance receipts for goods or services; working capital

pasteurizing or homogenizing or the making of butter, cheese and ice

interest or dividend income including federal-exempt interest and

cream. These activities should be reported on PA Schedule C.

dividend income from obligations of other states; gains from the sale of

business assets where the property is replaced by similar property;

(v) Fur-ranching. The propagation and raising of ranch raised fur-bearing

gains from involuntary conversions (such as those from IRC Section

animals.

1033); and gains from the sale of property where PA basis is different

(vi) Propagation of game birds. The propagation of game birds for

than federal basis.

commercial purposes by holders of propagation permits issued under

Examples of items that Pennsylvania allows as additions to expenses

34 Pa.C.S. § § 101—2965 of the Game and Wildlife Code.

that required a reduction for federal tax purposes include: a meals,

(vii) Propagation of aquatic animals. The propagation of fish and other

travel and entertainment expense deduction of 100 percent by

aquatic animals for commercial use as a food or food product by holders

Pennsylvania for the expenses incurred; any differences in depreciation

of propagation permits issued under 30 Pa.C.S. § § 101—7314 of the

related to differences in basis of assets, amount of allowable Section

Fish and Boat Code.

179 expense, or method of depreciation for federal or PA purposes; and

For more information regarding the definition of a business, profession

any other reductions in federal expenses allowed at 100 percent for PA

or farm activity and for Pennsylvania’s requirements for reporting

personal income tax purposes.

income and expenses, visit

Examples of items that Pennsylvania requires as reductions in federal

NOTE: Pennsylvania determines income and loss under those

income or expenses include: income taxes based upon gross or net

accounting principles, systems and practices acceptable by standards of

income; any differences in depreciation related to differences in basis

the accounting profession and consistent with the regulations of the

of assets, amount of allowable Section 179 expense, or method of

department.

depreciation for federal or PA purposes; recognition of cancellation of

debt income; recognition of income from IRC Section 481(a) spread

Pennsylvania does not generally follow federal tax accounting rules to

adjustments; payments for owner pension, profit-sharing plans,

determine income or loss. You may use any accounting method for PA

deferred, or welfare benefit plans; percentage depletion; direct expensing

purposes, as long as you apply accounting methods consistently.

of organizational expenses or syndication fees; losses from the sale of

Pennsylvania does not allow Farm Income Averaging.

property where PA basis is different than federal basis; and any other

income or expenses where there is a specialized federal treatment that

A farmer may deduct all losses in the taxable year realized. Report all

is not specifically addressed or allowed by PA personal income tax law

transactions directly related to your farming operation on PA Schedule F.

that might involve additional expensing, expensing verses capitalization,

You should maintain separate books and records for PA Personal Income

carry back or carry forward of losses, income recognition, or other

Tax (PIT) purposes. You may usually use your Federal Schedule F

special treatments.

expenses for PA PIT purposes. However, you may not use federal

Specific Instructions

amounts if you made certain elections to accelerate or defer income

Rounding. Enter amounts in whole-dollars only. Eliminate any amount

and expenses or spread expenses over more than one taxable year. To

less than $0.50 and increase any amount that is $0.50 or more to the

take advantage of the Pennsylvania reporting differences that decrease

your federal profit, complete PA Schedule F.

next highest dollar.

The Federal Schedule F instructions for the following federal schedules

A. Agricultural Activity Code. Enter the four-digit code that best

do not apply:

describes your principal income producing activity. If your principal

source of income is from providing agricultural services such as soil

Schedule SE. Do not report self-employment taxes to Pennsylvania.

preparation, veterinary, farm labor, horticultural or management for a

Form 4684. Report gain or loss from all business activity on PA

fee or on a contract basis, use the most appropriate federal Principal

Schedule F. Include a casualty or theft loss (or gain, if insurance

Agricultural Activity Codes from Part IV of Federal Schedule F shown on

proceeds exceed the basis of the property lost or taken) of business

side 2 of the PA Schedule F.

property on Line 11 of PA Schedule F. Reference the federal schedule as

the explanation for the gain or loss item, but do not submit the federal

B. Principal Product. Describe in one or two words your principal crop

schedule with your PA tax return.

or output for the current year.

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Pa Schedule F (Form Pa-40 F) - Farm Income And Expenses

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