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i1040x
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Page 1 of 12 14:00 - 6-Nov-2024

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2024 Instructions for Schedule F
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form
Profit or Loss 1040, 1040-SR, 1040-SS, 1040-NR, 1041, or 1065.
Your farming activity may subject you to state and local taxes and other require-
From Farming ments 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.

Section references are to the Internal Revenue Code unless instructions for details on the amount of the excess business
otherwise noted. loss limitation.
Form 7205, Energy Efficient Commercial Buildings Deduc-
Future Developments tion. This form and its separate instructions are used to claim
Forthe the latestsection information about179D developments relateddeduction to Sched-for qualifying energy efficient
ulecommercialFbuilding(Formexpenses. 1040) and its instructions, such as legislation enac-
tedIRS.gov/ScheduleF.Deduction for qualified business income. Foraftertaxtheyyearswerebe-published, go to
ginning after 2017, you may be entitled to a deduction of up to
What's New 20% of your qualified business income from your qualified
trade or business, plus 20% of the aggregate amount of quali-
Standard mileage rate. The business standard mileage rate is
fied real estate investment trust (REIT) dividends and qualified
67 cents a mile for 2024.
publicly traded partnership (PTP) income. The deduction is
New Form 172. Form 172, Net Operating Losses (NOLs) for subject to various limitations, such as limitations based on your
Individuals, Estates, and Trusts is a new form for figuring net type of trade or business, your taxable income, the amount of
operating losses (NOLs). This form replaces Schedules A and W-2 wages paid with respect to the trade or business, and the
Bunadjusted (Form 1045).basis immediately after acquisition of qualified
property held by the trade or business.
Special rules also exist for patrons of specified agricultural
Reminders or horticultural cooperatives, including the following.
Farmers and ranchers affected by drought may be eligible •Distributions from a cooperative that are included in a pa-
for extension of tax relief. Farmers and ranchers forced to sell tron's qualified business income and are identified on the Form
certain livestock because of drought conditions may have more 1099-PATR as qualified payments are subject to the patron re-
time to replace their livestock and defer tax on any gains from duction.
the IRS Tax Tip 2022-152 and IRS extends •A forced cooperative's sales. section See199A(g) deduction passed
relief to farmers and ranchers in 49 states and other areas.through to a patron on the Form 1099-PATR is included in the
patron's qualified business income deduction.
Business meals deduction. The temporary 100% deduction
for food or beverages provided by a restaurant has expired. The You will claim the deduction for qualified business income
business meal deduction reverted back to the 50% allowable on Form 1040 or 1040-SR. This deduction can be taken in ad-
deduction beginning January 1, 2023. See Travel and meals, dition to the standard or itemized deductions. For more infor-
later,mation,forseemoretheinformation.Instructions for Form 1040 and Pub. 334, Tax
Guide For Small Business.
Form 1040-SS, Part III, has been replaced. Schedule F
(Form 1040) is now filed with Form 1040-SS, if applicable. Net operating loss (NOL). An NOL can no longer be carried
For additional information, see the Instructions for Form back, unless the NOL is a farming loss. If you have an NOL
1040-SS.attributable to farming, you must carry it back to each of the 2
tax years preceding the tax year of the loss, unless you elect to
Business interest expense limitation. For tax years beginning forgo the carryback. Farming businesses can elect to forgo the
after 2017, your business interest expense deduction may be carryback and carry forward the farm NOL to a later year. For
limited. additional See information Form on 8990, NOLs Limitation for on individuals, Business estates Interest and Ex-
pensetrusts,underandSectioncorporations,163(j),seeandPub.its225instructionsandforFormdetails.172 and its in-
Excess business loss limitation rules.The structions. limitation on ex-
cess business losses for noncorporate taxpayers is applicable
for 2024. See Form 461, Limitation on Business Losses, and its

Instructions for Schedule F (Form 1040) (2024) Catalog Number 17152R
Nov 6, 2024 Department of the Treasury Internal Revenue Service www.irs.gov

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Small business taxpayers. For tax years beginning after cooperatives can make an election not to have the limitation
2017, more small business taxpayers may be eligible to use the apply.
cashSmall business taxpayer.•Formmethod1045oftoaccounting.requestSeea refund such as resulting from a
carryback loss.
Single-member limited liability company (LLC). Generally,
General Instructions a single-member domestic LLC isn't treated as a separate entity
for federal income tax purposes. If you are the sole member of
Other Schedules and Forms You May Have a domestic LLC engaged in the business of farming, file
To File Schedule F (Form 1040). However, you can elect to treat a do-
•SchedulemesticELLC(Formas1040),aPartcorporation.I,SeetoFormreport8832rentalforincomedetails on the
from pastureland based on a flat charge, and to report farm election.
rental income and expenses of a trust or estate based on crops Heavy highway vehicle use tax. If you use certain highway
or livestock produced by a tenant. However, report pasture trucks, truck-trailers, tractor trailers, or buses in your farming
income received from taking care of someone else’s livestock business, you may have to pay a federal highway motor vehicle
onuseScheduletax.FSee(Formthe1040),Instructionslinefor8.Form 2290 to find out if you
•ScheduleoweIRS.gov/Trucker Jthisfor(Formtaxthe1040)andlatesttogodevelop- figuretoyour tax by averaging
your farm income over the previous 3 years. Doing so may ments.
reduceInformation returns.You your tax.may have to file information re-
•Scheduleturns SE (Formfor 1040) towages pay self-employmentpaid tax onto employees, certain payments of fees
incomeandfromotheryournonemployeefarmingcompensation,business.interest, rents, royalties,
•Formreal172estatetotransactions,figureannuities,theandNetpensions.OperatingForLossdetails,(NOL).see
•FormLine F,461later,toandfiguretheexcess2024businessGeneralloss.Instructions for Certain In-
•Formformation3800Returns. to claim any general business credits.
•Form 4562 to claim depreciation (including the special
If you received cash of more than $10,000 in one or more
allowance) on assets placed in service in 2024, to claim
related transactions in your farming business, you may have to
amortization that began in 2024, to make an election under
file Form 8300. For details, see Pub. 1544.
section 179 to expense certain property, or to report
informationReportable transaction disclosure statement.Ifonyouvehiclesenteredand other listed property.
•Forminto4684atoreportablereporttransactionaincasualty2024,oryoutheftmustgainfileorFormloss8886
involving farm business property, including purchased to disclose certain information, as required by Treas. Reg. sec-
livestock held for draft, breeding, sport, or dairy purposes. See tion 1.6011-4 and the Instructions for Form 8886. You may
Pub. 225 for more information on how to report various farm have to pay a penalty if you are required to file Form 8886 but
losses, such as losses due to death of livestock or damage to don't do so. You may also have to pay interest and penalties on
cropsanyorreportableothertransactionfarmunderstatements.property.For more informa-
•Formtion 4797 toon report sales,reportable exchanges, ortransactions, involuntary see the Instructions for Form
conversions (other than from a casualty or theft) of certain farm 8886.
property. Also, use this form to report sales of livestock held
forFarm Owned and Operated by Spouses draft, breeding, sport, or dairy purposes.
•FormIf4835youtoandreportyourrentalspouseincomejointlybasedownonandcropoperateora farm as an
livestock shares produced by a tenant if you didn't materially unincorporated business and share in the profits and losses, you
participate in the management or operation of a farm. This can file Form 1065 and be treated as a partnership, or you each
incomecanisn'tfilesubjectScheduletoFself-employment(Formtax.1040)SeeasPub.a225.qualified joint venture.
•Form 6198 to figure your allowable loss if you have a
business loss and you have amounts invested in the business Qualified Joint Venture (QJV)
for which you aren't at risk.
•FormIf7205youtoandclaimyourthespousesectioneach179Dmateriallydeductionparticipateforasathe only
qualifyingmembersenergyofefficientacommercialjointlybuilding.owned and operated farm, and you file a
•Formjoint 8300 toreturn report cashfor payments overthe $10,000 tax year, you can elect to be treated as a
receivedQJV in ainstead trade orof business. a partnership. This election, in most cases,
•Formwon't8582increasetothefiguretotalyourtaxallowableowedlossonfromthepassivejoint return, but it does
activities.give each of you credit for social security earnings on which
•Formretirement8824benefitstoarereportbasedlike-kindandexchangesforofMedicarebusinesscoverageorwith-
investmentoutproperty.filing a partnership return. For an explanation of “material
•Formparticipation,”8990seetothefigureinstructionsanyforamountScheduleofCbusiness(Forminterest1040),
expense that is not subject to the interest expense limitation and line G; and Line E, later.
to figure the amount you can carry forward. However, a small Making the election. To make this election, you must divide
business taxpayer is not subject to the business interest expense all items of income, gain, loss, deduction, and credit attributa-
limitation and is not required to file Form 8990. Also, certain ble to the farming business between you and your spouse in ac-
farming businesses and specified agricultural or horticultural cordance with your respective interests in the venture. Each of

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you must file a separate Schedule F (Form 1040). On each line 
of your separate Schedule F (Form 1040), you must enter your       Line C
share of the applicable income, deduction, or loss. Each of you    If you use the cash method, check the box for “Cash.” Com-
must  also  file  a  separate  Schedule  SE  (Form  1040)  to  pay plete Schedule F (Form 1040), Parts I and II. In most cases, re-
self-employmentporttax,incomeasinapplicable.the year in which you actually or constructively 
Asreceived long asit you remainand qualified, yourdeduct election can'texpenses be re-in  the  year  you  paid  them. 
vokedHowever,withoutifIRStheconsent.payment of an expenditure creates an intangi-
                                                                   ble asset (such as a prepaid expense) having a useful life that 
For more information on QJVs, go to IRS.gov/QJV.
                                                                   extends beyond the earlier of 12 months after the creation of 
                                                                   the benefit or the end of the next tax year, it may not be deduc-
Exception—Community Income                                         tible or may be deductible only in part for the year of the pay-
If you and your spouse wholly own an unincorporated farming        ment. See chapter 2 of Pub. 225.
business as community property under the community property 
laws of a state, foreign country, or U.S. territory, you can treat If you use the accrual method, check the box for “Accrual.” 
yourCompletewhollyScheduleowned,Funincorporated(Formbusiness1040),asPartaI,solelineproprie-9; and Part II; 
torship, instead of a partnership. Any change in your reporting    and Part III. Generally, report income in the year in which you 
positionearnedwillitbeandtreateddeductasexpensesainconversiontheofyeartheyouentity.incurred them, 
Reportevenyourifincomeyouanddidn'tdeductionspayasthemfollows.in that year. Accrual-basis taxpay-
•Ifersonlyareoneputspouseonparticipatesaincashthebasisbusiness,foralldeductingofbusinesstheexpenses ow-
income from that business is the self-employment earnings of       ed to a related cash-basis taxpayer. Other rules determine the 
thetimingspouseofwhodeductionscarriedbasedonontheeconomicbusiness.performance. See Pub. 
•If538,bothAccountingspousesPeriodsparticipate,andtheMethods.                                                                                                                          income and deductions are 
allocatedFarming  syndicates.Farming to thesyndicates spouses basedcan't on theiruse distributive shares.the  cash 
•If method ofeither accounting. Aor farming syndicateboth may beyou a partner-                                                                                                                                   and  your  spouse  are  partners  in  a 
partnership,ship,seeanPub.LLC,541.an S corporation, or any other enterprise other 
•IfthanyouaandCyourcorporationspouseif:                                                                                                                                                elected to treat the business as a 
QJV,Qualified Joint Venture (QJV),•The seeearlier, forinterests how toin re-                                                                                                                   the  business  have  at  any  time  been  of-
portferedincomeforandsaledeductions.in a way that would require registration with any 
Statesfederalwithorcommunitystatepropertyagency,lawsor                                                                                                                                 include Arizona, Cali- 
fornia,•MoreIdaho,thanLouisiana,35%Nevada,ofNewtheMexico,lossesTexas,duringWash-any tax year are allo-
ington,  and  Wisconsin.  See  Pub.  555  for  more  information   cable  to  limited  partners  or  limited  entrepreneurs.  A  limited 
aboutpartner community propertyis laws.                                                                                                                                                one  who  can  lose  only  the  amount  invested  or  re-
                                                                   quired to be invested in the partnership. A limited entrepreneur 
Estimated Tax                                                      is a person who doesn't take any active part in managing the 
If you had to make estimated tax payments for 2024, and you        business.
underpaid your estimated tax, you won't be charged a penalty if 
bothLine D                                                                                                                               of the following apply. 
•YourEntergrossonfarminglineorDfishingtheincomeEINforthat2023wasorissued2024toisyou on Form SS-4. 
atDon'tleastentertwo-thirdsyourofSSN.yourDon'tgrossenterincome.another taxpayer's EIN (for 
•You example, If                                                                                                                            file from your any 2024 Forms tax 1099-MISC return that and you pay received).          the  tax  due  by 
Marchyou don't3,have an EIN, leave line D blank.                                                                                            2025. 

For details and alternative ways to avoid the estimated tax        You  need  an  EIN  only  if  you  have  a  qualified  retirement 
penalty, see the Instructions for Form 2210-F and chapter 15 of    plan or are required to file employment, excise, alcohol, tobac-
Pub.co,225.or firearms returns, or if you are a payer of gambling win-
                                                                   nings. If you need an EIN, see the Instructions for Form SS-4.
                                                                   Single-member LLCs. If you are a sole owner of an LLC that 
Specific Instructions                                              isn't treated as a separate entity for federal income tax purpo-
                                                                   ses, you may have an EIN that was issued to the LLC (and in 
Filers of Forms 1041 and 1065.Don'tthecompleteLLC'sthelegalblockname)la-if you are required to file employment 
beledtax“Socialreturnssecurityandnumbercertain(SSN).”exciseInstead,taxenterreturns.theHowever,em-you should 
ployer identification number (EIN) issued to the estate, trust, or enter  on  line  D  only  the  EIN  issued  to  you  and  in  your 
partnershipname as the sole proprietor of your farming business. onIflineyouD. 
                                                                   don't have such an EIN, leave line D blank. Don't enter on line 
Line B                                                             D the EIN issued to the LLC.
OnSingle-member LLCs with employees.Single-memberlineLLCsB, enter one of the 17 principal agricultural activity co- 
desthatlistedareindisregardedPartasIVentitiesonseparatepagefrom2theirofownersScheduleforF (Form 1040). Se- 
lectfederal the codeincome that besttax describes thepurposes source ofare most ofrequired your in-to  file  employment 
come.tax returns using the LLC's name and EIN rather than the LLC 

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owner's name and EIN. For more information, see the Instruc-
tionsPart I. Farm Income—Cash for Form SS-4.
Filers of Forms 1041 and 1065. Enter on line D the EIN is-
suedMethod to the estate, trust, or partnership.
In Part I, show income received for items listed on lines 1
Line E through 8. In most cases, include both the cash actually or con-
structively received and the fair market value (FMV) of goods
Material participation. Forortheotherdefinitionpropertyofreceivedmaterialforpartici-these items. Income is construc-
pationtivelyforreceivedpurposeswhenofit'sthecreditedpassivetoactivityyourrules,accountseeorthesetinstruc-aside
tions for Schedule C (Form 1040), line G. If you meet any of for you to use.
the material participation tests described in those instructions, If you received rents based on crop shares or farm produc-
checktiontheand“Yes”materiallybox.participated in the management or operation
If you are a retired or disabled farmer, you are treated as of a farm, report these rents as income on line 2.
materially participating in a farming business if you materially Sales of livestock because of weather-related conditions. If
participated 5 or more of the 8 years preceding your retirement you sold livestock because of drought, flood, or other weath-
or disability. Also, a surviving spouse is treated as materially er-related conditions, you can elect to report the income from
participatingtheinsaleainfarmingtheactivityyearifafterthethesurvivingyearspouseofac-sale if all of the following
tively manages the farm and the real property used for farming apply.
meets•Yourthemainestatebusinesstaxisrulesfarming. for special valuation of farm property
passed•Youfromcanashowqualifyingthatdecedent.you sold the livestock only because of
Check the “No” box if you didn't materially participate. If weather-related conditions.
you•Yourcheckedarea“No”qualifiedandforyoufederalhaveaid. a loss from this business, see
Limit on passive losses, next. If you have a profit from this See chapter 3 of Pub. 225 for details.
business activity but have current-year losses from other pas-
Chapter 11 bankruptcy. If you were a debtor in a chapter 11
sive activities or prior year unallowed passive activity losses,
bankruptcy case during 2024, see Chapter 11 Bankruptcy Ca-
see the Instructions for Form 8582.
ses in the Instructions for Form 1040 (under Income) and the
Limit on passive losses. If you checked the “No” box and you Instructions for Schedule SE (Form 1040).
have a loss from this business, you may have to use Form 8582
Forms 1099 or CCC-1099-G. If you received Forms 1099 or
to figure your allowable loss, if any, to enter on Schedule F
CCC-1099-G showing amounts paid to you, first determine if
(Form 1040), line 34. In most cases, you can deduct losses
the amounts are to be included with farm income. Then, use the
from passive activities only to the extent of income from pas-
following chart to determine where to report the income on
sive activities. For details, see Pub. 925.
Schedule F (Form 1040). Include the Form 1099 or
Note. FormCCC-1099-G1040-SSamountsfilers,inskipthethistotalline.amount reported on that line.

Where to
Line F Form report
If1099-PATR.......................Line 3a you made any payments in 2024 that would require you to
file1099-A.........................Line 5b any Forms 1099, check the “Yes” box. Otherwise, check
the1099-MISC............ forLine“No”crop6a box.insuranceSee the 2024 General Instructions for Certain In-
formation Returns in Guide to Information Returns if you are 1099-G or CCC-1099-G
unsure•For.............Linedisaster6a whetherpaymentsyou are required to file any Forms 1099. Also
see•For..Lineother4a theagriculturalseparateprogramspecificpaymentsinstructions for each Form 1099.

Note. Form 1040-SS filers, skip this line and Line G.
Generally, you must file Form 1099-MISC or Form You may receive Form 1099-MISC for other types of in-
TIP 1099-NEC if you paid at least $600 in rents, services, come. In this case, report it on whichever line best describes
prizes, medical and health care payments, and other the income. For example, if you receive a Form 1099-MISC for
income payments. See the Guide to Information Returns in the custom farming work, include this amount on line 7. In most
2024 General Instructions for Certain Information Returns cases, your business income will be in the form of cash,
which has more information, including the due dates for the checks, and debit/credit card payments. Therefore, you should
various information returns. consider the amounts shown on Form 1099-K, Payment Card
and Third Party Network Transactions, along with all other
amounts received, when calculating gross receipts. (See
Understanding Your 1099-K on IRS.gov.)

Lines 3a and 3b
If you received distributions from a cooperative in 2024, you
should receive a Form 1099-PATR. On line 3a, show your total

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distributionsForfeited CCC loans.Include from cooperatives.the This includesfull patronage divi-amount forfeited on
dends, nonpatronage distributions, per-unit retain allocations, line 5b, even if you reported the loan proceeds as income. This
and redemptions of nonqualified written notices of allocation amount may be reported to you on Form 1099-A.
and per-unit retain certificates.
If you didn't elect to report the loan proceeds as income, al-
Show patronage dividends received in cash and the dollar so include the forfeited amount on line 5c.
amount If youof did electqualified to reportwritten the loannotices proceeds asof income, youallocation. If you re-
ceived property as patronage dividends, report the FMV of the generally won't have an entry on line 5c. But if the amount for-
property as income. Include cash advances received from a feited is different from your basis in the commodity, you may
marketing cooperative. If you received per-unit retains in cash, have an entry on line 5c.
show the amount of cash. If you received qualified per-unit re-
tainSeecertificates,chaptershow3theofstatedPub.dollar225amountforofdetailstheoncertifi-the tax consequen-
cates.ces of electing to report CCC loan proceeds as income or for-
feiting CCC loans.
Don't include as income on line 3b patronage dividends
from buying personal or family items, capital assets, or depre-
ciable assets. Enter these amounts on line 3a only. Because you Lines 6a Through 6d
don't report patronage dividends from these items as income, In most cases, you must report crop insurance proceeds in the
you must subtract the amount of the dividend from the cost or year you receive them. Federal crop disaster payments are trea-
othertedbasisasofcroptheseinsuranceitems.proceeds. However, if 2024 was the year
of damage, you can elect to include certain proceeds in income
for 2025. To make this election, check the box on line 6c and
Lines 4a and 4b
attach a statement to your return. See chapter 3 of Pub. 225 for
Enteraondescriptionlineof4athetheproceedstotalforofwhichtheangovernmentelectionagriculturalcanpro-be made
gram payments that you received. This includes the following and for what you must include in your statement.
amounts.
•PriceIflossyoucoverageelectpayments.to defer any eligible crop insurance proceeds,
•Agricultureyouriskmustcoveragedeferpayments.all such crop insurance proceeds (including fed-
•CoronaviruseralFoodcropAssistancedisasterProgrampayments)payments.from a single trade or business.
•Market Facilitation Program payments.
•MarketEntergainonfromlinethe6arepaymenttheoftotalacropsecuredinsuranceCommodityproceeds you re-
Credit Corporation (CCC) loan for less than the original loan ceived in 2024, even if you elect to include them in income for
amount.2025.
•Diversion payments.
•Cost-shareEnterpaymentson(sightlinedrafts).6b the taxable amount of the proceeds you re-
•Payments ceived inin 2024. Don'tthe include proceedsform you electof to includematerials in (such as fertilizer or
lime)incomeorforservices2025. (such as grading or building dams).

These amounts are usually reported to you on Form 1099-G. Enter on line 6d the amount, if any, of crop insurance pro-
You may also receive Form CCC-1099-G from the Department ceeds you received in 2023 and elected to include in income
of Agriculture showing the amounts and types of payments for 2024.
made to you.
On line 4b, report only the taxable amount. For example, Line 8
don't report the market gain shown on Form CCC-1099-G on Enter on line 8 income not otherwise reportable on lines 1
line 4b if you elected to report CCC loan proceeds as income in through 7. This includes the following types of income.
theLines 5a Through 5c ).•IllegalyearNofederalreceivedgainirrigation(seeresultssubsidies. See chapter 3 of Pub.
from225. redemption of the commodity because you previously re-
ported•Barteringtheincome. CCC loan proceeds as income. You are treated as re-
purchasing •Income fromthe cancellation ofcommodity debt. Infor most cases,the if aamount debt of the loan repay-
ment.isHowever,cancelediforyouforgiven,didn'tyoureportmusttheincludeCCCtheloancanceledproceedsamountun-
derin the election,income. you mustIf report thea market gainfederal on lineagency, 4b. financial institution, or credit
union canceled or forgave a debt you owed of $600 or more, it
Lines 5a Through 5c should send you a Form 1099-C, or similar statement, by Janu-
ary 31, 2025, showing the amount of debt canceled in 2024.
CCC loans.In However, youmost may becases, able toyou exclude thedon't canceled debtreport from CCC loan pro-
ceeds as income. However, if you pledge part or all of your income. See Pub. 4681 for details.
production•StatetogasolinesecureorafuelCCCtaxloan,refundsyouyoucanreceivedelectinto2024. report the
loan•Any proceeds asamount income inincluded the yearin you receiveincome them. Iffrom you line 3 of Form
make this election (or made the election in a prior year), report 6478, Biofuel Producer Credit.
loan•Any proceeds youamount received inincluded 2024 onin line 5a.income Attach afrom state- line 10 of Form
ment to your return showing the details of the loan(s). See 8864, Biodiesel, Renewable Diesel, or Sustainable Aviation
chapterFuels3Credit. of Pub. 225.

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•Thetionamount263A.ofSectioncredit263Aforgenerallyfederaldoesn'ttaxapplypaidtoonthefuelsfollow- claimed
oningyourexpenses. 2023 Schedule 3 (Form 1040). For information on in-
cluding1.theProducingcreditanyinplantincome,thatseehaschaptera2preproductionofperiodPub.of510.2
•Anyyearsrecaptureorofless. excess depreciation on any listed prop-
erty, including any section 179 expense deduction, if the busi-
2. Raising animals.
ness use percentage of that property decreased to 50% or less
in 2024. Use Part IV of Form 4797 to figure the recapture. See 3. Replanting certain crops if they were lost or damaged by
the instructions for Schedule C (Form 1040), line 13, for the reason of freezing temperatures, disease, drought, pests, or
definitioncasualty. of listed property.
•The Exceptions (1)inclusion and (2)amount don't applyon to taxleased shelters, farminglisted property (other
than vehicles) when the business use percentage drops to 50% syndicates, partnerships, or corporations required to use the ac-
orcrualless.methodSeeofchapteraccounting5underofsectionPub.447946orto448(a)(3). figure the amount.
•Any recapture of the deduction or credit for clean-fuel ve-
Special rules apply to exception (3) if replanting costs are
hicle refueling property or alternative fuel vehicle refueling
paid or incurred by a taxpayer other than the person described
property used in your farming business. For details on how to
in section 263A(d)(2)(A). See sections 263A(d)(2)(B) and (C)
figure recapture, see section 30C(e)(5).
for these different rules. Under section 263A(d)(2)(C), there is
•Any income from breeding fees, or fees from renting
a temporary rule for replanting costs of citrus plants that are
teams, machinery, or land that isn't reported on Schedule E
paid or incurred after December 22, 2017, and on or before De-
(Form 1040) or Form 4835.
cember 22, 2027.
•The gain or loss on the sale of commodity futures con-
tracts if the contracts were made to protect you from price Small business taxpayer. A small business taxpayer is one
changes.thatThesehasaregrossareceiptsformofof$30businessmillioninsuranceorandlessareforcon-the 3 prior tax
sidered hedges. If you had a loss in a closed futures contract, years and is not a tax shelter, as defined in section 448(d)(3).
encloseSeeRev. Proc. 2023–34 (upda- thealsoamounttheofinflationtheadjustmentlossinin parentheses.
For property acquired and hedging positions estab- ted annually), which increased the threshold for small business
taxpayers from $29 million to $30 million for tax years begin-
! lished, you must clearly identify on your books and re- ning in 2024.
CAUTION cords both the hedging transaction and the item(s) or
aggregate risk being hedged. If you capitalize your expenses, don't reduce your deduc-
tions on lines 10 through 32e by the capitalized expenses. In-
Purchase or sales contracts aren't true hedges if they offset stead, enter the total amount capitalized in parentheses on
losses that already occurred. If you bought or sold commodity line 32f (to indicate a negative amount) and enter “263A” in
futures with the hope of making a profit due to favorable price the space to the left of the total. See Preproductive period ex-
changes, report the profit or loss on Form 6781 instead of this penses, later, for details.
line.But you may be able to currently deduct rather than capital-
ize the expenses of producing a plant with a preproductive peri-
od of more than 2 years.
Part II. Farm Expenses Election to deduct certain preproductive period expenses.
Don'tIfdeductthethepreproductivefollowing.period of any plant you produce is more
•Personalthan or living2 expenses (suchyears, as taxes,you insurance, orcan elect to currently deduct the expenses
repairsratheronthanyourcapitalizehome)them.thatButdon'tyouproducecan'tfarmmakeincome.this election for
•Expensestheofcostsraisingofanythingplantingyouororgrowingyourcitrusfamilyorusedalmondthatgroves incur-
would not have otherwise been deductible as an expense except red before the end of the fourth tax year beginning with the tax
foryeartheyoupresenceplantedofthemtheinincome-producingtheirfarmpermanentactivity.grove. You are trea-
•Thetedvalueasofhavinganimalsmadeyoutheraisedelectionthatbydied.deducting the preproductive
•Inventoryperiodlosses.expenses in the first tax year for which you can make
•Personalthislosses.election and by applying the special rules, discussed later.
In the case of a partnership or S corporation, the elec-
If you were repaid for any part of an expense during the
tion must be made by the partner, shareholder, or
sameCAUTION! year, you must subtract the amount you were repaid from
member. This election can't be made by tax shelters,
the deduction.
farming syndicates, partnerships, or corporations required to
Capitalizing costs to property produced and property ac- use the accrual method of accounting under section 447 or
quired for resale. If you produced real or tangible personal 448(a)(3).
property or acquired property for resale, you must generally
Unless you obtain IRS consent, you must make this election
capitalize certain expenses to your inventory or other property.
for the first tax year in which you engage in a farming business
These expenses include the direct costs of the property and any
involving the production of property subject to the capitaliza-
indirect costs properly allocable to that property.
tion rules. You can't revoke this election without IRS consent.
For tax years beginning after 2017, small business taxpay-
ers, defined later, are not required to capitalize costs under sec-

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Special  rules.  If If youyou claim anymake car orthe truck expenseselection (actual orto the stand-                                                                                                                 deduct  prepro- 
ductiveardexpensesmileageforrate),plants:you must provide the information requested 
•AnyongainFormyou4562,realizePartwhenV.disposingBeofsurethetoplantsattachisFormordi-4562 to your re-
nary income up to the amount of the preproductive expenses              turn.
you deducted, and
•The For details,alternative see chapterdepreciation 4 ofrules Pub. 463.                                                                                                                                 apply  to  property 
placed in service in any tax year your election is in effect.
For details, see Uniform Capitalization Rules in chapter 6 of           Line 12
Pub.Deductible225.conservation expenses are generally those that are 
                                                                        paid to conserve soil and water for land used in farming, to pre-
Prepaid  farm  supplies.  In  most  cases,  if  you  use  the  cash     vent erosion of land used for farming, or for endangered spe-
method of accounting and your prepaid farm supplies are more            cies  recovery.  These  expenses  include  (but  aren't  limited  to) 
thancosts50%foroftheyourfollowing.                                                                                                                          other deductible farm expenses, your deduc- 
tion for those supplies may be limited. Prepaid farm supplies                The  treatment  or  movement  of  earth,  such  as  leveling, 
include•                                                                                                                                       expenses for feed, seed, fertilizer, and similar farm sup- 
                                                                        grading, conditioning, terracing, contour furrowing, and the re-
pliesstorationnotofusedsoilorfertility.                                                                                                                     consumed during the year. 
They•The also includeconstruction, the costcontrol, of poultryand that wouldprotection be allowa-of  diversion 
blechannels, as adrainage deduction inditches, a laterirrigation tax yearditches, if youearthen were to:dams, 
1. Capitalize  the  cost  of  poultry  bought  for  use  in  your       watercourses, outlets, and ponds.
farming •The eradicationbusiness of brush.                                                                                                                  and  deduct  it  ratably  over  the  lesser  of  12 
months•Theorplantingtheofusefulwindbreaks.                                                                                                                  life of the poultry, and 
2.•The Deduct theachievement cost ofof poultry boughtsite-specific for resalemanagement in theactionsyear 
yourecommendedsellinorrecoveryotherwiseplansdisposeapprovedofpursuantit.to the En-
                                                                        dangered Species Act of 1973.
If  the  limit  applies,  you  can  deduct  prepaid  farm  supplies 
that don't exceed 50% of your other deductible farm expenses            These  expenses  can  be  deducted  only  if  they're  consistent 
in the year of payment. You can deduct the excess only in the           with  a  conservation  plan  approved  by  the  Natural  Resources 
year  you  use  or  consume  the  supplies  (other  than  poultry,      Conservation Service of the Department of Agriculture or a re-
whichcoveryisplandeductible,approvedaspursuantexplainedtoabove).theForEndangereddetailsSpeciesandActex- 
ceptionsofto1973theseforrules,theseeareachapterin4whichofyourPub.land225.is located. If no plan 
Whether  or  not  this  50%  limit  applies,  your  expenses  for       exists, the expenses must be consistent with a plan of a compa-
livestock feed paid during the year but consumed in a later year        rable state agency. You can't deduct the expenses if they were 
maypaidbeorsubjectincurredtoforthelandrulesusedexplainedininfarmingtheinlinea16foreigninstructions.country.

                                                                        Don't deduct expenses you paid or incurred to drain or fill 
Line 10                                                                 wetlands, or to prepare land for center pivot irrigation systems.
You  can  deduct  the  actual  expenses  of  operating  your  car  or 
truckYourordeductiontakecan'ttheexceedstandard25%mileageofrate.yourYougrossmustincomeusefromactual ex- 
penses if you used five or more vehicles simultaneously in your         farming  (excluding  certain  gains  from  selling  assets  such  as 
farmingfarm business (suchmachinery as inand fleet operations).land). You can'tIf use ac-your  conservation  expenses  are 
tual  expenses  for  a  leased  vehicle  if  you  previously  used  the more than the limit, the excess can be carried forward and de-
standardductedmileageinratelaterfortaxthatyears.vehicle.However, the amount deductible for 
                                                                        any  1  year  can't  exceed  the  25%  gross  income  limit  for  that 
Youyear.                                                                                                                                       can take the standard mileage rate for 2024 only if you: 
•Owned the vehicle and used the standard mileage rate for 
theForfirstdetails,yearseeyouchapterplaced5theofvehiclePub.in225.                                                                                                                                        service, or 
•Leased  the  vehicle  and  are  using  the  standard  mileage 
rate for the entire lease period.
                                                                        Line 13
IfEnteryouamountstakepaidtheforstandardcustommileagehirerate:or machine work (the ma-
•Multiplychinetheoperatorbusinessfurnishedstandardthemileageequipment).                                                                                                                          rate by 67 cents a 
mile; and
•AddDon'ttoincludethisamountsamountpaidyourforparkingrentalfeesorandleasetolls,ofandequipmententer 
theyou total onoperated line 10.yourself.  Instead,  report  those  amounts  on 
Don't deduct depreciation, rent or lease payments, or your              line 24a.
actual operating expenses.
IfLine 14                                                                                                                                      you deduct actual expenses: 
•Include You canon deduct depreciationline of buildings,10 improvements, carsthe  business  portion  of  expenses  for 
gasoline,andoil,trucks,repairs,machinery,insurance,andlicenseotherplates,farmetc.;equipmentandof a perma-
•Shownentdepreciationnature.                                                                                                                            on line 14 and rent or lease payments 
on line 24a.

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Don't•Deducting deduct depreciationthe of yourprepayment home, furniturewon't or othermaterially distort your
personal items, land, livestock you bought or raised for resale, income.
or other property in your inventory.
If all of the above apply, you can deduct the prepaid feed
You can also elect under section 179 to expense a portion of when paid, subject to the overall limit for Prepaid farm sup-
the cost of certain property you bought in 2024 for use in your plies, explained earlier. If all of the above don’t apply, you can
farming business. The section 179 election is made on Form deduct the prepaid feed only in the year it's consumed.
4562.
Special depreciation allowance. For certain trees and vines Line 18
bearing fruits and nuts, planted or grafted after September 27,
2017, and before January 1, 2027, you may elect to claim the Don't include the cost of transportation incurred in purchasing
special depreciation allowance at the time they were planted or livestock held for resale as freight paid. Instead, add these costs
grafted. Additional property placed in service in 2024 may to the cost of the livestock.
qualify for the special depreciation allowance. See the Instruc-
tionsLine 20 for Form 4562 for more information.
Electing farming business. If you made an election not to Deduct on this line premiums paid for farm business insurance.
haveDeduct the businesson interest expenseline limitation apply,15 any proper-amounts paid for employee accident and
ty with a recovery period of 10 years or more held by you must health insurance. Amounts credited to a reserve for self-insur-
be depreciated under the alternative depreciation system. For ance or premiums paid for a policy that pays for your lost earn-
details, see Rev. Proc. 2019-08, available at IRS.gov/irb/ ings due to sickness or disability aren't deductible. For details,
2019-03_IRB#RP-2019-08 see(orchapterits4successor).of Pub. 225.
For information about depreciation and the section 179 de-
duction, see Pub. 946 and chapter 7 of Pub. 225. For details on Lines 21a and 21b
theInterest allocation rules.The special depreciationtax allowance, seetreatment chapter 3of of Pub.interest 946. ex-
See the Instructions for Form 4562 for information on when pense differs depending on its type. For example, home mort-
yougagemustinterestcompleteandandinvestmentattachinterestFormare4562.treated differently. In-
terest allocation rules require you to allocate (classify) your
interest expense so it's deducted (or capitalized) on the correct
Line 15 line of your return and receives the right tax treatment. These
Deduct contributions to employee benefit programs that aren't rules could affect how much interest you are allowed to deduct
an incidental part of a pension or profit-sharing plan included on Schedule F (Form 1040).
on line 23. Examples are accident and health plans, group-term In most cases, you allocate interest expense by tracing how
life insurance, and dependent care assistance programs. If you the proceeds of the loan are used. See chapter 4 of Pub. 225 for
made contributions on your behalf as a self-employed person to details.
a dependent care assistance program, complete Form 2441,
Parts I and III, to figure your deductible contributions to that If you paid interest on a debt secured by your main home
program.and any of the proceeds from that debt were used in your farm-
ing business, see chapter 4 of Pub. 225 to figure the amount to
Contributions you made on your behalf as a self-employed include on lines 21a and 21b.
personHow to report.Beforetoenteringananaccidentamountandonhealthlineplan21aororfor21b,group-term life in-
suranceseearen'tthedeductibleInstructionsonforScheduleFormF8990(Formto1040).identifyHowev-whether you are
er, you may be able to deduct on Schedule 1 (Form 1040), required to limit your business interest expense or whether you
line 17, the amount you paid for health insurance on behalf of can elect not to limit your business interest expense. If you are
yourself, your spouse, and your dependent(s) even if you don't required to limit your business interest expense, include only
itemize your deductions. See the instructions for Schedule 1 the amount you are allowed to deduct on lines 21a and 21b. If
(Formyou1040),arelinenot17,requiredfortodetails.limit your business interest expense and
You must reduce your line 15 deduction by the amount of if you have a mortgage on real property used in your farming
anybusinesscredit(otherforthansmallyouremployermainhealthhome),insuranceenterpremiumsondeter-line 21a the in-
minedterestonyouFormpaid8941.forSee2024Formto8941banksandoritsotherinstructionsfinancialtoinstitutionsde-
termineforwhichwhichexpensesyouarereceivedeligibleaforFormthe1098credit.(or similar statement). If
you didn't receive a Form 1098, enter the interest on line 21b.
Line 16 If you paid more mortgage interest than is shown on Form
1098 (or similar statement), see chapter 4 of Pub. 225 to find
If you use the cash method, you can't deduct when paid the cost
out if you can deduct the additional interest. If you can, include
of feed your livestock will consume in a later year unless all of
the amount on line 21a. Attach a statement to your return ex-
the following apply.
plaining the difference and enter “See attached” in the margin
•The payment was for the purchase of feed rather than a
next to line 21a.
deposit.
•TheIfprepaymentyouhadandaatbusinessleastpurposeoneandotherwasn'tpersonmade(other than your spouse
merelyiftoyouavoidfiletax.a joint return) were liable for and paid interest on the

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mortgageleasedandathevehicleotherforpersonareceivedtermtheofForm301098days(ororsim-more, you may have to
ilar statement), include your share of the interest on line 21b. reduce your deduction by an inclusion amount. See Leasing a
Attach Car ina chapter 4statement of Pub.to 463 toyour figure thisreturn amount. showing the name and ad-
dress of the person who received the Form 1098 (or similar
statement).EnterInonthelinemargin24bnextamountstopaidlineto21b,rententeror“Seeleaseattached.”other proper-
ty such as pasture or farmland.
Don't deduct interest you prepaid in 2024 for later years; in-
clude only the part that applies to 2024.
Line 25
Enter amounts you paid for repairs and maintenance of farm
Line 22
buildings, machinery, and equipment that are not payments for
Enter the amounts you paid for farm labor. Don't include improvements to the property. Amounts are paid for improve-
amounts paid to yourself. Reduce your deduction by the ments if they are for betterments to your property or restora-
amountstionsclaimedofonyourthepropertyfollowing.(such as the replacements of major com-
•Formponents 5884, Workor Opportunity Credit.substantial structural parts), or if they adapt your
•Formproperty8844,toEmpowermentaZonenewEmploymentorCredit.different use. See chapter 4 of Pub. 225
•Formfor8932,moreCreditinformation. for Employer Differential Wage Pay-
ments.
•FormDon't8994,deductEmployerrepairsCreditorformaintenancePaidonFamilyyourandhome. Medi-
cal Leave.
However, you may be able to elect to capitalize and depreci-
Include the cost of boarding farm labor but not the value of ate certain amounts paid for repair and maintenance of tangible
any products they used from the farm. Include only what you property to the extent you treat these amounts as capital expen-
paidditures household helpon to careyour for farmbooks laborers. and records regularly used in figuring
If you provided taxable fringe benefits to your employ- your income and expenses. For details, see chapter 8 of Pub.
225.
! ees, such as personal use of a car, don't include in
CAUTION farm labor the amounts you depreciated or deducted
elsewhere. Line 29
You can deduct the following taxes on this line.
Line 23 •Real estate and personal property taxes on farm business
assets.
Enter •Social your security deduction and for Medicare contributions taxes to you employee paid pension,to match
profit-sharing, or annuity plans. If the plan included you as a what you are required to withhold from farm employees' wa-
self-employed person, enter contributions made as an employer ges.
on •Federal unemploymentyour tax. behalf on Schedule 1 (Form 1040), line 16, not on
Schedule•FederalFhighway(Formuse1040).tax.
In•Contributionsmosttocases,ayoustatemustunemploymentfileinsurancethefundapplicableorform listed next
ifdisability you maintainbenefit a pension,fund profit-sharing, orif other funded-de-they're considered taxes under state
ferred compensation plan. The filing requirement isn't affected law.
by whether the plan qualified under the Internal Revenue Code, Don't deduct the following taxes on this line.
or whether you claim a deduction for the current tax year. Federal income taxes, including your self-employment
•
There is a penalty for failure to timely file these forms. See tax. However, you can deduct one-half of self-employment tax
U.S. Department of Labor.on Schedule 1 (Form 1040), line 15.
Form 5500-EZ.File •Estate andthis gift taxes. form if you have a one-participant
retirement•Taxes plan thatassessed meets certainfor requirements. Aimprovements, one-partici- such as paving and
pant plan is a plan that covers only you (or you and your sewers.
spouse).•Taxes on your home or personal-use property. You may
Form 5500-SF.FilebethisableformtoelectronicallydeductwithonthelineDepart-32 expenses related to your home or
ment of Labor (at efast.dol.gov) if you have a small plan (fewer principle residence, such as property taxes, if you use your
thanhomeBusiness use of your 100toparticipantsconductinfarmingmostactivities.cases)Seethat meets certain require-
ments.home, later.
Form 5500. File•StatethisandformlocalelectronicallysaleswithtaxestheonDepartmentproperty purchased for use
in your farming business. Instead, treat these taxes as part of
of Labor (at efast.dol.gov) for a plan that doesn't meet the re-
the cost of the property.
quirements for filing Form 5500-EZ or 5500-SF.
•Other taxes not related to your farming business.
For details, see Pub. 560.
Line 30
Lines 24a and 24b Enter amounts you paid for gas, electricity, water, and other
If you rented or leased vehicles, machinery, or equipment, enter utilities for business use on the farm. Don't include personal
on line 24a the business portion of your rental cost. But, if you utilities. You can't deduct the base rate (including taxes) of the

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first telephone line into your residence, even if you use it for Legal and professional fees. You can include on this line fees
your farming business. But you can deduct expenses you paid charged by accountants and attorneys that are ordinary and nec-
for your farming business that are more than the cost of the essary expenses directly related to your farming business. In-
basecluderatefeesforforthetaxfirstadvicephoneandline.forFortheexample,preparationifofyoutaxhadformsa sec-
ond phone line, you can deduct the business percentage of the related to your farming business. Also, include expenses incur-
chargesredforinthatresolvingline,assertedincludingtaxthedeficienciesbaserelatedratetocharges.your farm-
ing business.
Lines 32a Through 32f Tools. You can deduct the amount you paid for tools that have
Include all ordinary and necessary farm expenses not deducted a short life or cost a small amount, such as shovels and rakes.
elsewhere on Schedule F (Form 1040), such as advertising, of-
ficeTravel and meals.Insupplies,mostetc.cases,Don'tyouincludecanfinesdeductorexpensespenaltiesforpaid to a gov-
ernmentfarmforbusinessviolatingtravelanyandlaw.50%Forofdetailsyouronbusinessbusinessmeals.expen-See the
ses,instructionsseeforchapterSchedule4Cof(FormPub.1040),225.lines 24a and 24b.
Entertainment expenses related to your trade or busi-
At-risk loss deduction. Any loss from this activity that wasn't ! ness are generally no longer deductible after 2017.
allowedCAUTION last year because of the at-risk rules is treated as a de-
duction allocable to this activity in 2024. See Form 6198 and
itsPreproductive period expenses.Ifinstructionsyouforhadmorepreproductivedetails.pe-
riod expenses in 2024 that you are capitalizing, enter the total
Bad debts. See chapter 8 of Pub. 334.
of these expenses in parentheses on line 32f (to indicate a nega-
Business startup costs. If your farming business began in tive amount) and enter “263A” in the space to the left of the to-
2024, you can elect to deduct up to $5,000 of certain business tal.
startup costs. The $5,000 limit is reduced (but not below zero) For details, see Capitalizing costs to property produced and
by the amount by which your startup costs exceed $50,000. property acquired for resale, earlier, and Uniform Capitaliza-
Your remaining startup costs can be amortized over a tion Rules in chapter 6 of Pub. 225.
180-monthExcess business loss limitation.Noncorporateperiod,taxpayersbeginningmaywith the month the farming busi-
ness began. For details, see chapters 4 and 7 of Pub. 225. For be subject to excess business loss limitations. The at-risk limits
amortization that begins in 2024, you must complete and attach and the passive activity limits are applied before calculating the
Formamount4562.of any excess business loss. An excess business loss is
Business use of your home.Youthemayamountbebyablewhichtothededucttotalcer-deductions attributable to all of
tainyourexpensestradesfororbusinessbusinessesuseexceedofyouryourtotalhome,grosssubjectincometoandlimita-
tions.gainsYouattributablemaytoalsothosebetradesableortobusinessesuseplusa$305,000simplified method to fig-
ure your deduction. Use the appropriate worksheets in Pub. 587 (or $610,000 in the case of a joint return). A trade or business
toincludes,figurebutyourisallowablenotdeduction.limitedDon'tto,useScheduleFormF8829.and Schedule C ac-
tivities, an activity reported on Form 4835, and other business
De minimis safe harbor for tangible property. You may be activities reported on Schedule E.
able to elect to use a de minimis safe harbor to deduct amounts
paid for certain tangible real or personal property used in your Business gains and losses reported on Form 4797 and Form
farming business. If you elect the de minimis safe harbor for 8949 are included in the excess business loss calculation. This
theincludestaxfarmingyear,lossesenterfromthecasualtytotallossesamountsoryoulossespaidbyforrea- property qual-
ifyingsonunderofthediseasedeorminimisdrought.safeExcessharborbusinessonlosseslinethat32.areDon’tdisal- in-
cludelowed these amountsare on anytreated other line.as For details,an see chap-NOL carryover to the following tax
teryear.8SeeofFormPub.461334.and its instructions for details.
Energy efficient commercial buildings deduction. You may
be able to deduct part or all of the expenses of modifying an Line 33
existing commercial building to make it energy efficient. For If line 32f is a negative amount, subtract it from the total of
details,linessee10Formthrough720532e.andEnteritstheinstructions.result on line 33.

Forestation and reforestation costs. Reforestation costs are
generally capital expenditures. However, for each qualified Line 34
timber property, you can elect to expense up to $10,000 Figuring your net profit or loss. If line 33 is more than
($5,000 if married filing separately) of qualifying reforestation line 9, don't enter your loss on line 34 until you have applied
coststhe paid orat-risk incurred inrules 2024. and the passive activity loss rules. To apply
You can elect to amortize the remaining costs over 84 these rules, follow the instructions for line 36 and the Instruc-
months.tionsForforamortizationFormthat8582.beginsAfterinapplying2024,theseyourules,mustthecom-amount on
pletelineand34attachwillFormbe4562.your loss, and it may be smaller than the amount
figured by subtracting line 33 from line 9. You may also be re-
Thequiredamortizationtoelectionfiledoesn'tFormapply461,towhichtrusts,limitsandthetheallowableex-loss. See
pense election doesn't apply to estates and trusts. For details on Form 461 and its instructions for more information.
reforestation expenses, see chapters 4 and 7 of Pub. 225.

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If line 9 is more than line 33 , and you don't have prior-year
unallowed passive activity losses, subtract line 33 from line 9 . Line 35
TheReserved for future use. result is your net profit.
If line 9 is more than line 33 , and you have prior-year unal-
lowed passive activity losses, don't enter your net profit on Line 36
line 34 until you have figured the amount of prior-year unal-
lowed passive activity losses you may claim this year for this You don't need to complete line 36 if line 9 is more
activity.TIP than line 33. Use Form 8582 to figure the amount of prior-year un-
allowed passive activity losses you may include on line 34.
Make sure to indicate that you are including prior-year passive At-risk rules. In most cases, if you have a loss from a farming
activityactivity losses byand entering "PAL"amounts to theinvested left ofin the entrythe space. activity for which you
If you checked the "No" box on line E, see the Instructions aren't at risk, you must complete Form 6198 to figure your al-
for Form 8582; you may need to include information from this lowable loss. The at-risk rules generally limit the amount of
schedulelosson(includingthatlossform,oneventheifdispositionyouofhaveassets)ayounetcanprofit.claim
to the amount you could actually lose in the activity.
Partnerships. Subtract line 33 from line 9. If the amount is
Check box 36b if you have amounts invested in this activity
a loss, the partners may need to apply the at-risk rules and the
for which you aren't at risk, such as the following.
passive activity loss rules to determine the amount of their loss
on•Nonrecourselineloans34.usedAtopartnerfinancemaythealsoactivity,betorequiredacquireto file Form 461 to
property used in the activity, or to acquire the activity that
limit any excess business loss. See Form 461 and its instruc-
aren't secured by your own property (other than property used
tions for more information.
in the activity). However, there is an exception for certain non-
Reporting your net profit or loss. Once you have figured recourse financing borrowed by you in connection with holding
yourrealnetproperty. profit or loss, report it as follows. You must also con-
sider any excess business loss limitation. See Form 461 and its Cash, property, or borrowed amounts used in the activity
•
instructions(orforcontributedmoretoinformation.the activity, or used to acquire the activity)
Individuals. Enter your net profit or loss on line 34 and on that are protected against loss by a guarantee, stop-loss agree-
Schedule 1 (Form 1040), line 6 and; Schedule SE (Form 1040), ment, or other similar arrangement (excluding casualty insur-
lineance1a.and insurance against tort liability).
•Amounts borrowed for use in the activity from a person
Nonresident aliens. Enter the net profit or loss on line 34 who has an interest in the activity, other than as a creditor, or
and on Schedule 1 (Form 1040), line 6. You should also enter who is related under section 465(b)(3)(C) to a person (other
this amount on Schedule SE (Form 1040), line 1a, if you are than you) having such an interest.
covered under the U.S. social security system due to an interna-
Figuring your loss. Before determining your loss on line 34,
tional social security agreement currently in effect. See the In-
you must check box 36a or 36b to determine if your loss from
structions for Schedule SE (Form 1040) or SSA.gov/
farming is limited by the at-risk rules. Follow the instructions
international/agreements for information on international so-
below that apply to your box 36 activity.
cial security agreements.
All investment is at risk. If all your investment amounts are
Partnerships. Enter the net profit or loss on line 34 and on
at risk in this activity, check box 36a. If you also checked the
Form 1065, line 5. The excess business loss rules are applied at
“Yes” box on line E, your remaining loss is your loss. The
the partner level.
at-risk rules and the passive activity loss rules don't apply. See
Trusts and estates. Enter the net profit or loss on line 34 Line 34, earlier, for how to report your loss.
andBut,onifFormyou1041,checkedlinethe6.“No” box on line E, you may need
Community income. If you and your spouse had community to complete Form 8582 to figure your loss to enter on Line 34.
income and are filing separate returns, see the Instructions for See the Instructions for Form 8582.
Schedule SE (Form 1040) before figuring self-employment tax.
Some investment isn't at risk. If some investment isn't at
Earned income credit. If you have a net profit on line 34, this risk, check box 36b; the at-risk rules apply to your loss. Be sure
amount is earned income and may qualify you for the earned to attach Form 6198 to your return.
income credit if you meet certain conditions. See the instruc-
If you also checked the “Yes” box on line E, complete Form
tions for Form 1040, line 27, for details.
6198 to determine the amount of your loss. The passive activity
Conservation Reserve Program (CRP) payments.IflossLine 34 ,yourulesearlier,re-don'tforapply.howSeeto report
ceivedyoursocialloss. security retirement or disability benefits in addi-
tion to CRP payments, the CRP payments aren't subject to
But, if you checked the “No” box on line E, the passive ac-
self-employment tax. You will deduct these payments from
tivity loss rules may apply. First, complete Form 6198 to figure
your net farm profit or loss on Schedule SE (Form 1040),
the amount of your profit or loss for the at-risk activity, which
line 1b. Don't make any adjustment on Schedule F (Form
may include amounts reported on other forms and schedules,
1040).
and the at-risk amount for the activity. Follow the Instructions
for Form 6198 to determine how much of your Schedule F

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

(Form 1040) loss to enter on line 34. After you figure the
amount of your loss under the at-risk rules, you may need to Lines 38a Through 40c
complete Form 8582 to figure the amount of loss to enter on See the instructions for lines 3a through 5c, earlier.
line 34. See the Instructions for Form 8582 for details.
If you checked box 36b because some investment isn't Line 43
! at risk and you don't attach Form 6198, the process- See Line 8, earlier.
CAUTION ing of your return may be delayed.
Paperwork Reduction Act Notice. We ask for the informa-
At-risk loss deduction.Any tion onloss this formfrom to carrythis out theactivity Internal Revenuenot laws ofal-the
lowed for 2024 only because of the at-risk rules is treated as a United States. You are required to give us the information. We
deductionneedallocableittototheensureactivitythatinyou2025.are complying with these laws and to
More information. Forallowdetails,usseetoPub.figure925andandcollectthetheInstruc-right amount of tax.
tionsYouforaren'tFormrequired6198.toAlso,provideseetheForminformation461requestedandonits instructions.
a form that is subject to the Paperwork Reduction Act unless
Note. Formthe1040-SSformfilersdisplaysskipathisvalidline.OMB control number. Books or re-
cords relating to a form or its instructions must be retained as
long as their contents may become material in the administra-
Part III. Farm Income—Accrual tion of any Internal Revenue law. Generally, tax returns and re-
turn information are confidential, as required by section 6103.
Method The time needed to complete and file this form will vary de-
You may be required to use the accrual method of accounting. pending on individual circumstances. The estimated burden for
If you use the accrual method, report farm income when it is individual taxpayers filing this form is included in the esti-
due,matespaid,shownearned,inorthetakeninstructionsintoforaccounttheirasindividualrevenueincomeintaxits appli-
cablereturn.financialThestatement,estimatednotburdenwhenforyouallreceiveotherit.taxpayersInwhomostfileca-
ses, you must include animals and crops in your inventory if this form is approved under OMB control number 1545-1975
you use this method. See Pub. 225 for exceptions, inventory and is shown next.
methods, how to change methods of accounting, and rules that
requireRecordkeeping.......................11 hr.,certain16costsmin. to be capitalized or included in inventory.
ForLearning about the law or the form........... 2informationhr.,about33accountingmin. periods, see Pub. 538.
Chapter 11 bankruptcy.IfPreparing and sending the form to the IRS...... 5youhr.,were10amin. debtor in a chapter 11
bankruptcy case during 2024, see Chapter 11 Bankruptcy Ca-
ses in the Instructions for Form 1040 (under Income) and the If you have comments concerning the accuracy of these time
Instructionsestimates for Scheduleor SE (Formsuggestions 1040). for making this form simpler, we
would be happy to hear from you. See the instructions for the
tax return with which this form is filed.

F-12

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