Form PA-40 Schedule F "Farm Income and Expenses" - Pennsylvania

What Is Form PA-40 Schedule F?

This is a legal form that was released by the Pennsylvania Department of Revenue - a government authority operating within Pennsylvania.The document is a supplement to Form PA-40, Pa Schedule F - Farm Income and Expenses. As of today, no separate filing guidelines for the form are provided by the issuing department.

Form Details:

  • Released on May 1, 2019;
  • The latest edition provided by the Pennsylvania Department of Revenue;
  • Easy to use and ready to print;
  • Quick to customize;
  • Compatible with most PDF-viewing applications;
  • Fill out the form in our online filing application.

Download a fillable version of Form PA-40 Schedule F by clicking the link below or browse more documents and templates provided by the Pennsylvania Department of Revenue.

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Download Form PA-40 Schedule F "Farm Income and Expenses" - Pennsylvania

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2003310055
PA SCHEDULE F
Farm Income
START
and Expenses
HERE
PA-40 F (EX) 09-20
Include with Form
(FI)
20___
PA Department of Revenue
PA-40, PA-20S/PA-65 or PA-41
OFFICIAL USE ONLY
Name of owner as shown on PA tax return:
Owner’s
Social Security Number
A. Principal Agricultural Activity Code. Write the code that best describes your principal
B Principal Product. Describe in one or two words your principal
income-producing activity. Codes are listed on the reverse side of this schedule.
crop or output for the current tax year.
Taxpayer Identification Number (not SSN)
If you disposed of commodities received under the payments-in-kind program, fill in the oval(s) that apply:
C
Feed for livestock
Sold and reported in income
SECTION I
Farm Income—Cash Method—Complete Sections I and II
Sales Tax License Number (if applicable)
(Accrual method taxpayers complete Sections II and III and Line 12 of Section I.)
1. Sales of livestock and other items bought for resale
1.
2. Cost or other basis of livestock and other items bought for resale
2.
3. Subtract Line 2 from Line 1
3.
4. Sales of livestock, produce, grains and other products raised
4.
5. a. Total distributions received from cooperatives (from Form 1099-PATR)
5a.
5a
b. Less: Non-income items
5b.
5b
6. Net distributions. Subtract Line 5b from Line 5a
6.
7. Agricultural program payments:
a. Cash
7a.
b. Materials and services
7b.
8. Commodity credit loans under election (or forfeited)
8.
9. Crop insurance proceeds
9.
10. Machine work
10.
11. Other income, including federal and state gasoline tax credit or refund, interest income and sales of
operational assets
11.
12. Gross income. Add amounts on Lines 3, 4, 6 and 7a through 11. If using the accrual method, enter the
amount from Section III, Line 51
12.
Farm Deductions-Cash and Accrual Method
. Do not include personal or living expenses. Reduce the amount
SECTION II
of your farm deductions by any reimbursements before entering the deduction.
13. Breeding fees
27. Other interest
14. Chemicals
28. Pension and profit-sharing plans for
employees
15. Conservation expenses
29. Rent of farm, pasture
16. a. Regular depreciation
30. Repairs, maintenance
b. Section 179 expense
31. Seeds, plants purchased
17. Employee benefit programs other than
32. Storage, warehousing
those on Line 28
33. Supplies purchased
18. Feed purchased
34. Taxes
19. Fertilizers and lime
35. Utilities
20. Freight, trucking
36. Veterinary fees, medicine
21. Gasoline, fuel, oil
37. Other expenses (specify):
22. Insurance
a.
23. a. Labor hired
b.
b. Jobs credit
c.
c. Balance (subtract Line 23b from
d.
Line 23a)
e.
24. Land clearing
f.
25. Machine hire
37. Total other expenses
26. Mortgage interest paid to financial
38. Total expenses (Add Lines 13
institutions
through 37.)
Loss
39. Net farm profit or loss Subtract Line 38 from Line 12. If a net loss is shown, fill in the oval.
Enter the result on your PA tax return.
39.
SIDE 1
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2003310055
PA SCHEDULE F
Farm Income
START
and Expenses
HERE
PA-40 F (EX) 09-20
Include with Form
(FI)
20___
PA Department of Revenue
PA-40, PA-20S/PA-65 or PA-41
OFFICIAL USE ONLY
Name of owner as shown on PA tax return:
Owner’s
Social Security Number
A. Principal Agricultural Activity Code. Write the code that best describes your principal
B Principal Product. Describe in one or two words your principal
income-producing activity. Codes are listed on the reverse side of this schedule.
crop or output for the current tax year.
Taxpayer Identification Number (not SSN)
If you disposed of commodities received under the payments-in-kind program, fill in the oval(s) that apply:
C
Feed for livestock
Sold and reported in income
SECTION I
Farm Income—Cash Method—Complete Sections I and II
Sales Tax License Number (if applicable)
(Accrual method taxpayers complete Sections II and III and Line 12 of Section I.)
1. Sales of livestock and other items bought for resale
1.
2. Cost or other basis of livestock and other items bought for resale
2.
3. Subtract Line 2 from Line 1
3.
4. Sales of livestock, produce, grains and other products raised
4.
5. a. Total distributions received from cooperatives (from Form 1099-PATR)
5a.
5a
b. Less: Non-income items
5b.
5b
6. Net distributions. Subtract Line 5b from Line 5a
6.
7. Agricultural program payments:
a. Cash
7a.
b. Materials and services
7b.
8. Commodity credit loans under election (or forfeited)
8.
9. Crop insurance proceeds
9.
10. Machine work
10.
11. Other income, including federal and state gasoline tax credit or refund, interest income and sales of
operational assets
11.
12. Gross income. Add amounts on Lines 3, 4, 6 and 7a through 11. If using the accrual method, enter the
amount from Section III, Line 51
12.
Farm Deductions-Cash and Accrual Method
. Do not include personal or living expenses. Reduce the amount
SECTION II
of your farm deductions by any reimbursements before entering the deduction.
13. Breeding fees
27. Other interest
14. Chemicals
28. Pension and profit-sharing plans for
employees
15. Conservation expenses
29. Rent of farm, pasture
16. a. Regular depreciation
30. Repairs, maintenance
b. Section 179 expense
31. Seeds, plants purchased
17. Employee benefit programs other than
32. Storage, warehousing
those on Line 28
33. Supplies purchased
18. Feed purchased
34. Taxes
19. Fertilizers and lime
35. Utilities
20. Freight, trucking
36. Veterinary fees, medicine
21. Gasoline, fuel, oil
37. Other expenses (specify):
22. Insurance
a.
23. a. Labor hired
b.
b. Jobs credit
c.
c. Balance (subtract Line 23b from
d.
Line 23a)
e.
24. Land clearing
f.
25. Machine hire
37. Total other expenses
26. Mortgage interest paid to financial
38. Total expenses (Add Lines 13
institutions
through 37.)
Loss
39. Net farm profit or loss Subtract Line 38 from Line 12. If a net loss is shown, fill in the oval.
Enter the result on your PA tax return.
39.
SIDE 1
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2003410053
PA SCHEDULE F
Farm Income
and Expenses
PA-40 F (EX) 09-20
(FI)
20___
PA Department of Revenue
OFFICIAL USE ONLY
START
Social Security Number
Name of owner as shown on PA tax return:
HERE
SECTION III
Farm Income—Accrual Method
40. Sales of livestock, produce, grains and other products during year
40.
41. Agricultural program payments:
a. Cash
41a.
b. Materials and services
41b.
42. Commodity credit loans under election (or forfeited)
42.
43. Machine work
43.
44. Other income, including federal and state gasoline tax credit or refund
44.
45. Total. Add amounts on Lines 40 through 44.
45.
46. Inventory of livestock, produce, grains and other products at beginning of
year
46.
47. Cost of livestock, produce, grains and other products purchased during year 47.
48. Add Lines 46 and 47.
48.
49. Inventory of livestock, produce, grains and other products at end of year
49.
50. Cost of livestock, produce, grains and other products sold. Subtract Line 49 from Line 48.
50.
51. Gross income. Subtract Line 50 from Line 45. Enter here and on Section I, Line 12.
51.
Principal Agricultural Activity Codes
0180
Horticultural specialty, including the growing of ornamental
floriculture and nursery products such as plants, shrubbery,
bulbs, flowers, sod, etc.
Select one of the following codes and write the four-digit number on
Line A on Page 1 of this schedule.
0211
Beef cattle feedlots
NOTE: If your principal source of income is from providing agri-
0212
Beef cattle, except feedlots
cultural services such as soil preparation, veterinary, farm labor,
0215
Hogs, sheep and goats
horticultural or management for a fee or on a contract basis,
you should file PA Schedule C.
0240
Dairy
0250
Poultry and eggs, including chickens, ducks, pigeons, quail,
etc.
0120
Field crop, including grains and nongrains such as cotton,
0260
General livestock, not specializing in any one livestock cate-
peanuts, feed corn, wheat, tobacco, Irish potatoes, etc.
gory
0160
Vegetables and melons, garden-type vegetables and mel-
0270
Animal specialty, including fur-bearing animals, pets, fish,
ons, such as sweet corn, tomatoes, squash, etc.
horses, etc.
0170
Fruit and tree nuts, including grapes, berries, olives, etc.
0300
Agricultural production, not specified.
SIDE 2
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Instructions for PA-40 Schedule F
Farm Income and Expenses
PA-40 F IN (EX) 09-20
(vii) Propagation of aquatic animals. The propagation of fish
OVERVIEW
and other aquatic animals for commercial use as a food or
food product by holders of propagation permits issued under
Use PA Schedule F to report income or loss from a business
30 Pa.C.S. § § 101—7314 of the Fish and Boat Code.
you operate as a farm. The following definitions may be
helpful in determining if you should file a PA Schedule C or
For more information regarding the definition of a business,
PA Schedule F:
profession or farm activity and for Pennsylvania’s
requirements for reporting income and expenses, visit
Farming - The following activities, when engaged in as a
www.revenue.pa.gov.
regular business:
(i) Agriculture. The business of producing food products or
NOTE: Pennsylvania determines income and loss
other useful or valuable growths or crops by tilling and
under those accounting principles, systems and
cultivating the soil, and by breeding, raising and feeding
practices acceptable by standards of the accounting
cattle, livestock, bees, poultry or other animals that produce
profession and consistent with the regulations of the
a food product or are themselves a food product. For
department.
example, the commercial raising of mushrooms is farming,
Pennsylvania does not generally follow federal tax
but gardening and similar noncommercial activities are not
accounting rules to determine income or loss. You may use
farming. The following are not included within the definition
any accounting method for PA purposes, as long as you
of agriculture:
apply accounting methods consistently.
(A) The breeding or raising of dogs, cats and other pets;
Pennsylvania does not allow Farm Income Averaging.
or game animals, birds, fish or other animals intended
for use in sporting or recreational activities such as,
A farmer may deduct all losses in the taxable year realized.
but not limited to, hunting, fishing, show competition
Report all transactions directly related to your farming
and racing.
operation on PA Schedule F.
(B) The operation of stockyards or slaughterhouses.
You should maintain separate books and records for PA
(ii) Horticulture. The business of producing vegetables,
Personal Income Tax (PIT) purposes. You may usually use
vegetable plants, fruits and nursery stock, including the
your Federal Schedule F expenses for PA PIT purposes.
operation of commercial vegetable greenhouses and
However, you may not use federal amounts if you made
nurseries. Horticulture does not ivnclude the business of
certain elections to accelerate or defer income and
servicing plants owned by other persons.
expenses or spread expenses over more than one taxable
year. To take advantage of the Pennsylvania reporting
(iii) Floriculture. The business of producing flowers and
differences that decrease your federal profit, complete PA
decorative or shade trees, plants and shrubs in the field,
Schedule F.
nursery or greenhouse. The raising of trees as timber or
lumbering and logging or sawmill operations are not included
The Federal Schedule F instructions for the following federal
in the definition of floriculture.
schedules do not apply:
(iv) Dairy farming. The business of breeding, feeding and
SCHEDULE SE
raising cattle and other milk producing animals, and the
Do not report self-employment taxes to Pennsylvania.
production of feed for them by the owner of the animals. This
doesn’t include operations such as pasteurizing or
FORM 4684
homogenizing or the making of butter, cheese and ice
Report gain or loss from all business activity on PA Schedule
cream. These activities should be reported on PA Schedule
F. Include a casualty or theft loss (or gain, if insurance
proceeds exceed the basis of the property lost or taken) of
C.
business property on Line 11 of PA Schedule F. Reference
(v) Fur-ranching. The propagation and raising of ranch
the federal schedule as the explanation for the gain or loss
raised fur-bearing animals.
item, but do not submit the federal schedule with your PA tax
(vi) Propagation of game birds. The propagation of game
return.
birds for commercial purposes by holders of propagation
permits issued under 34 Pa.C.S. § § 101—2965 of the
FORM 4835
Game and Wildlife Code.
Report rental income from farm production or crop shares
www.revenue.pa.gov
PA-40 F
1
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related to differences in basis of assets, amount of allowable
whether or not you materially participate in the production of
that income as rental income on PA Schedule E.
Section 179 expense, or method of depreciation for federal
Pennsylvania does not have "materially participating" rules.
or PA purposes; recognition of cancellation of debt income;
An owner may deduct all losses in the taxable year realized.
recognition of income from IRC Section 481(a) spread
Only report on PA Schedule F the income, expenses and
adjustments; payments for owner pension, profit-sharing
profit or loss from the operation of your farm enterprise.
plans, deferred, or welfare benefit plans; percentage
depletion; direct expensing of organizational expenses or
FORM 8824
syndication fees; losses from the sale of property where PA
Do not report like-kind exchanges on PA Schedule F.
basis is different than federal basis; and any other income
Pennsylvania laws and regulations do not recognize like-
or expenses where there is a specialized federal treatment
kind exchanges. Report any gain or loss from any sale,
that is not specifically addressed or allowed by PA personal
exchange or disposition on Line 11 of PA Schedule F, if the
income tax law that might involve additional expensing,
transaction was a normal business transaction. Report any
gain or loss from other dispositions (nonbusiness) on PA
expensing verses capitalization, carry back or carry forward
Schedule D.
of losses, income recognition, or other special treatments.
If you own or operate more than one farm or farming
Pennsylvania is not a community property state. Therefore,
operation, you must submit a separate PA Schedule F for
for PA personal income tax purposes, a taxpayer and the
each operation.
taxpayer’s spouse must each report on a separate PA
Schedule F their share of the income and expenses from a
OTHER PENNSYLVANIA AND
farm entity they own that is considered a qualified joint
FEDERAL INCOME TAX DIFFERENCES
venture for federal income tax purposes.
PA income from farming generally differs from the income
SPECIFIC INSTRUCTIONS
determined for federal income tax purposes. Further,
Pennsylvania will no longer accept a PA Schedule C-F
ROUNDING
Reconciliation for the purpose of adjusting the federal farm
Enter amounts in whole-dollars only. Eliminate any amount
income to PA farm income. Therefore, the items which were
less than $0.50 and increase any amount that is $0.50 or
previously included as additions to PA income or expenses
more to the next highest dollar.
on the PA Schedule C-F Reconciliation should be included
with the specific line of income or expense on PA Schedule
LINE INSTRUCTIONS
F. In addition, those items which Pennsylvania does not
require be reported as income or does not allow as expense
in determining net farm income, which are allowed in the
LINE A
determination of net federal farm income, should not be
included in the specific farm income or expenses on PA
PRINCIPAL AGRICULTURAL ACTIVITY CODES
Schedule F.
Enter the four-digit code that best describes your principal
income producing activity. If your principal source of income
Examples of items that Pennsylvania requires as additions
is from providing agricultural services such as soil
to income include: any advance receipts for goods or
preparation, veterinary, farm labor, horticultural or
services; working capital interest or dividend income
management for a fee or on a contract basis, use the most
including federal-exempt interest and dividend income from
appropriate Principal Agricultural Activity Code shown on
obligations of other states; gains from the sale of business
Side 2 of the PA Schedule F.
assets where the property is replaced by similar property;
gains from involuntary conversions (such as those from IRC
Section 1033); and gains from the sale of property where PA
LINE B
basis is different than federal basis.
PRINCIPAL PRODUCT
Examples of items that Pennsylvania allows as additions to
Describe in one or two words your principal crop or output
expenses that required a reduction for federal tax purposes
for the current year.
include: a meals, travel and entertainment expense
deduction of 100 percent by Pennsylvania for the expenses
DISPOSITION OF PAYMENTS-IN-KIND COMMODITIES
incurred; any differences in depreciation related to
If you disposed of commodities received under the
differences in basis of assets, amount of allowable Section
payments-in-kind program, fill in the oval for the
179 expense, or method of depreciation for federal or PA
description(s) that apply.
purposes; and any other reductions in federal expenses
Enter your federal Employer Identification Number (FEIN).
allowed at 100 percent for PA personal income tax purposes.
If you do not have an FEIN, leave this space blank.
Examples of items that Pennsylvania requires as reductions
in federal income or expenses include: income taxes based
Enter your PA Sales Tax License Number if you have one,
upon gross or net income; any differences in depreciation
or leave this space blank.
2
PA-40 F
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the year they are received even if the payment is based
SECTION I
upon multiple years of damages.
FARM INCOME - CASH METHOD -
SECTION II
COMPLETE SECTIONS I AND II
FARM DEDUCTIONS - CASH AND ACCRUAL METHOD
LINES 5a and 5b
Include current expenses that are ordinary, necessary and
reasonable for producing farming income. Do not include
On Line 5a, show your total distributions from cooperatives,
personal or living expenses. PA law does not impose dollar
including patronage dividends, nonpatronage distributions,
or percentage limitations on allowable expenses. You may
per-unit retain allocations and redemption of nonqualified
notices and per-unit allocations.
always deduct 100 percent of the PA allowable farm
expenses that you incurred during the taxable year.
Show patronage dividends (distributions) received in cash
and the dollar amount of qualified written notices of
LINE 15
allocation. If you received property as patronage dividends,
report the fair market value of the property as income.
CONSERVATION EXPENSES
On Line 5b, enter patronage dividends from buying personal
You may deduct certain expenditures (including any amount
or family items, capital assets or depreciable assets.
paid on any assessment levied by a soil or water
conservation or drainage district to defray expenditures
LINE 7b
made) for soil or water conservation and the prevention of
erosion if the expenditures are in respect of land you use.
MATERIALS AND SERVICES
The allowable deduction for any one year may not exceed
Include the amount from 1099-G, Box 9, Market Gain,
25 percent of your gross income from farming, but any
associated with any Commodity Credit Corporation (CCC)
excess may be carried over to succeeding years with the
loan where the proceeds from the loan were not originally
same limit applying to those years.
elected to be included as income. Write ”Market Gain” in the
space to right of “Materials and services” when including an
To claim a deduction for these expenditures, you must elect
amount from this source. Include a schedule if more than
to do so by claiming the deduction on your return for the first
one type of income is reported on this line.
taxable year for which the expenditures are paid. Once you
have elected to treat the expenditures as deductions, you
LINE 11
must continue to do so in all future taxable years unless you
secure consent to change.
OTHER INCOME
Enter gross proceeds you may have to report elsewhere on
LINE 16a
your federal tax return. Include the income from the sale of
business assets you reinvested and used to acquire similar
REGULAR DEPRECIATION
business assets. Also include the gain or loss on replacing
You may use any depreciation method permissable under
business property (including land or buildings used by the
accepted accounting principles and practices as long as you
facility in the operation of a farm) and interest and dividend
income from investments that generated working capital.
consistently apply the method.
Include other income as described for Line 8 of Federal
NOTE: For each asset, you must also report straight-
Schedule F. PA PIT law and regulations do not limit
line depreciation, unless not using an optional
depreciation when business property use (or the inclusion
accelerated depreciation method. You need straight-line
amount on leased property adjustment) falls below 50
depreciation to take advantage of Pennsylvania’s Tax
percent. You may deduct the allowable business
Benefit Rule when you sell the asset.
depreciation as described below on such property. Do not
report "depreciation recapture" for PA Personal Income Tax
You must use the straight-line depreciation method if your
purposes. Do not include income from oil and gas well
PA basis and federal a basis for an asset differ.
royalties, well access easements or right-of-ways as other
income on PA Schedule F - even if the well is located on the
LINE 16b
farm property. Oil and gas royalty payments should be
reported on PA Schedule E along with any temporary
SECTION 179 EXPENSE
easement or right-of-way payments. Payments for oil and
Current expensing is limited to the expensing allowed at the
gas pipeline or well access express easements (15 years or
time you placed the asset into service, or the expensing in
longer) or permanent right-of-ways should be reported on
effect under the IRC of 1986 as amended Jan. 1, 1997.
PA Schedule D. Payments from oil and gas producers for
Pennsylvania follows the federal definitions for listed
crop damage should be included as other income on PA
property.
Schedule F. All payments for crop damage are reportable in
www.revenue.pa.gov
PA-40 F
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