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                                                 i1040x
AHFileid:(Init.…&XSL/XMLform-1040)/2024/a/xml/cycle04/sourceDate) _______
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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 

F-2

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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 

                                                                                                                         F-3

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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. 

                                                                                                                              F-5

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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 

F-8