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12Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule F
Profit or Loss
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form
1040, 1040NR, 1041, or 1065.
From Farming
Your farming activity may subject you to state and local taxes and other require-
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
Standard mileage rate. The standard mileage rate for busi-
otherwise noted.
ness use of your vehicle for 2018 is 54.5 cents per mile.
Future Developments
General Instructions
For the latest information about developments related to Sched-
ule F (Form 1040) and its instructions, such as legislation enac-
Other Schedules and Forms You May Have
ted after they were published, go to IRS.gov/ScheduleF.
To File
•
Schedule E (Form 1040), Part I, to report rental income
What's New
from pastureland based on a flat charge. However, report on
Schedule F (Form 1040), line 8, pasture income received from
Business interest expense limitation. For tax years beginning
taking care of someone else's livestock. Also use Schedule E
after 2017, your business income interest expense deduction
(Form 1040), Part I, to report farm rental income and expenses
may be limited. See Form 8990 and its instructions for details.
of a trust or estate based on crops or livestock produced by a
Deduction for qualified business income. For tax years be-
tenant.
•
ginning after 2017, you may be entitled to a deduction of up to
Schedule J (Form 1040) to figure your tax by averaging
20 percent of your qualified business income from your quali-
your farm income over the previous 3 years. Doing so may
fied trade or business, plus 20 percent of the aggregate amount
reduce your tax.
•
of qualified real estate investment trust (REIT) dividends and
Schedule SE (Form 1040) to pay self-employment tax on
qualified publicly traded partnership (PTP) income. The deduc-
income from your farming business.
•
tion is subject to various limitations such as limitations based
Form 3800 to claim any general business credits.
•
on your type of trade or business, your taxable income, the
Form 4562 to claim depreciation (including the special
amount of W-2 wages paid with respect to the trade or busi-
allowance) on assets placed in service in 2018, to claim
ness, and the unadjusted basis immediately after acquisition of
amortization that began in 2018, to make an election under
qualified property held by the trade or business. You will claim
section 179 to expense certain property, or to report
this deduction on Form 1040, and unlike other deductions, this
information on vehicles and other listed property.
•
deduction can be taken in addition to the standard or itemized
Form 4684 to report a casualty or theft gain or loss
deductions. For more information, see the Instructions for
involving farm business property, including purchased
Form 1040 and Pub. 535, Business Expenses.
livestock held for draft, breeding, sport, or dairy purposes. See
Pub. 225 for more information on how to report various farm
Excess farm loss limitation. The excess farm loss rules don't
losses, such as losses due to death of livestock or damage to
apply in 2018. However, any loss from this activity that wasn't
crops or other farm property.
allowed last year because of the excess farm loss rules is trea-
•
Form 4797 to report sales, exchanges, or involuntary
ted as a deduction allocable to this activity in 2018. See Form
conversions (other than from a casualty or theft) of certain farm
461 and its instructions for details on the amount of excess
property. Also use this form to report sales of livestock held for
business loss limitation.
draft, breeding, sport, or dairy purposes.
Net operating loss (NOL). An NOL can no longer be carried
•
Form 4835 to report rental income based on crop or
back to any tax year, unless the NOL is a farming loss. To the
livestock shares produced by a tenant if you didn't materially
extent the NOL is a farming loss, you can carry back the NOL
participate in the management or operation of a farm. This
to each of the 2 tax years preceding the tax year of the loss. For
income isn't subject to self-employment tax. See Pub. 225.
additional information on NOLs for individuals, estates and
•
Form 6198 to figure your allowable loss if you have a
trusts, and corporations, see Pubs. 225 and 536.
business loss and you have amounts invested in the business
Small business taxpayers.
For tax years beginning after
for which you aren't at risk.
2017, more small business taxpayers may be eligible to use the
cash method.
F-1
Oct 23, 2018
Cat. No. 17152R
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule F
Profit or Loss
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form
1040, 1040NR, 1041, or 1065.
From Farming
Your farming activity may subject you to state and local taxes and other require-
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
Standard mileage rate. The standard mileage rate for busi-
otherwise noted.
ness use of your vehicle for 2018 is 54.5 cents per mile.
Future Developments
General Instructions
For the latest information about developments related to Sched-
ule F (Form 1040) and its instructions, such as legislation enac-
Other Schedules and Forms You May Have
ted after they were published, go to IRS.gov/ScheduleF.
To File
•
Schedule E (Form 1040), Part I, to report rental income
What's New
from pastureland based on a flat charge. However, report on
Schedule F (Form 1040), line 8, pasture income received from
Business interest expense limitation. For tax years beginning
taking care of someone else's livestock. Also use Schedule E
after 2017, your business income interest expense deduction
(Form 1040), Part I, to report farm rental income and expenses
may be limited. See Form 8990 and its instructions for details.
of a trust or estate based on crops or livestock produced by a
Deduction for qualified business income. For tax years be-
tenant.
•
ginning after 2017, you may be entitled to a deduction of up to
Schedule J (Form 1040) to figure your tax by averaging
20 percent of your qualified business income from your quali-
your farm income over the previous 3 years. Doing so may
fied trade or business, plus 20 percent of the aggregate amount
reduce your tax.
•
of qualified real estate investment trust (REIT) dividends and
Schedule SE (Form 1040) to pay self-employment tax on
qualified publicly traded partnership (PTP) income. The deduc-
income from your farming business.
•
tion is subject to various limitations such as limitations based
Form 3800 to claim any general business credits.
•
on your type of trade or business, your taxable income, the
Form 4562 to claim depreciation (including the special
amount of W-2 wages paid with respect to the trade or busi-
allowance) on assets placed in service in 2018, to claim
ness, and the unadjusted basis immediately after acquisition of
amortization that began in 2018, to make an election under
qualified property held by the trade or business. You will claim
section 179 to expense certain property, or to report
this deduction on Form 1040, and unlike other deductions, this
information on vehicles and other listed property.
•
deduction can be taken in addition to the standard or itemized
Form 4684 to report a casualty or theft gain or loss
deductions. For more information, see the Instructions for
involving farm business property, including purchased
Form 1040 and Pub. 535, Business Expenses.
livestock held for draft, breeding, sport, or dairy purposes. See
Pub. 225 for more information on how to report various farm
Excess farm loss limitation. The excess farm loss rules don't
losses, such as losses due to death of livestock or damage to
apply in 2018. However, any loss from this activity that wasn't
crops or other farm property.
allowed last year because of the excess farm loss rules is trea-
•
Form 4797 to report sales, exchanges, or involuntary
ted as a deduction allocable to this activity in 2018. See Form
conversions (other than from a casualty or theft) of certain farm
461 and its instructions for details on the amount of excess
property. Also use this form to report sales of livestock held for
business loss limitation.
draft, breeding, sport, or dairy purposes.
Net operating loss (NOL). An NOL can no longer be carried
•
Form 4835 to report rental income based on crop or
back to any tax year, unless the NOL is a farming loss. To the
livestock shares produced by a tenant if you didn't materially
extent the NOL is a farming loss, you can carry back the NOL
participate in the management or operation of a farm. This
to each of the 2 tax years preceding the tax year of the loss. For
income isn't subject to self-employment tax. See Pub. 225.
additional information on NOLs for individuals, estates and
•
Form 6198 to figure your allowable loss if you have a
trusts, and corporations, see Pubs. 225 and 536.
business loss and you have amounts invested in the business
Small business taxpayers.
For tax years beginning after
for which you aren't at risk.
2017, more small business taxpayers may be eligible to use the
cash method.
F-1
Oct 23, 2018
Cat. No. 17152R
•
Form 8582 to figure your allowable loss from passive
but it does give each of you credit for social security earnings
activities.
on which retirement benefits are based and for Medicare cover-
•
Form 8824 to report like-kind exchanges.
age without filing a partnership return. For an explanation of
•
Form 8990 to figure any interest expense limitation and
“material participation,” see the Instructions for Schedule C
carryover amount. However, a small business taxpayer is not
(Form 1040), line G, and Line E, later, in these instructions.
subject to the business interest expense limitation and is not
Making the election. To make this election, you must divide
required to file Form 8990. Also, certain farming businesses
all items of income, gain, loss, deduction, and credit attributa-
and specified agricultural or horticultural cooperatives can
ble to the farming business between you and your spouse in ac-
make an election not to have the limitation apply.
cordance with your respective interests in the venture. Each of
•
Form 461 to compute your excess business loss.
you must file a separate Schedule F (Form 1040). On each line
•
Form 1045 to compute any carryback loss.
of your separate Schedule F (Form 1040), you must enter your
Also, see the Deduction for Qualified Business Income Work-
share of the applicable income, deduction, or loss. Each of you
sheet in the Instructions for Form 1040 to figure a deduction
also must file a separate Schedule SE (Form 1040) to pay
for qualified business income.
self-employment tax, as applicable.
Single-member limited liability company (LLC). Generally,
As long as you remain qualified, your election can't be re-
a single-member domestic LLC isn't treated as a separate entity
voked without IRS consent.
for federal income tax purposes. If you are the sole member of
For more information on qualified joint ventures, go to
a domestic LLC engaged in the business of farming, file
IRS.gov
and enter “qualified joint venture” in the search box.
Schedule F (Form 1040). However, you can elect to treat a do-
mestic LLC as a corporation. See Form 8832 for details on the
Exception—Community Income
election.
If you and your spouse wholly own an unincorporated farming
Heavy highway vehicle use tax. If you use certain highway
business as community property under the community property
trucks, truck-trailers, tractor trailers, or buses in your farming
laws of a state, foreign country, or U.S. possession, you can
business, you may have to pay a federal highway motor vehicle
treat your wholly owned, unincorporated business as a sole
use tax. See the Instructions for Form 2290 to find out if you
proprietorship, instead of a partnership. Any change in your re-
owe this tax and go to
IRS.gov/Trucker
for the latest develop-
porting position will be treated as a conversion of the entity.
ments.
Report your income and deductions as follows.
Information returns. You may have to file information re-
•
If only one spouse participates in the business, all of the
turns for wages paid to employees, certain payments of fees
income from that business is the self-employment earnings of
and other nonemployee compensation, interest, rents, royalties,
the spouse who carried on the business.
real estate transactions, annuities, and pensions. For details, see
•
If both spouses participate, the income and deductions are
Line F later, and the 2018 General Instructions for Certain In-
allocated to the spouses based on their distributive shares.
formation Returns.
•
If either or both you and your spouse are partners in a
If you received cash of more than $10,000 in one or more
partnership, see Pub. 541.
related transactions in your farming business, you may have to
•
If you and your spouse elected to treat the business as a
file Form 8300. For details, see Pub. 1544.
qualifying joint venture, see Qualified Joint Venture, earlier,
for how to report income and deductions.
Reportable transaction disclosure statement. If you entered
States with community property laws include Arizona, Cali-
into a reportable transaction in 2018, you must file Form 8886
fornia, Idaho, Louisiana, Nevada, New Mexico, Texas, Wash-
to disclose information if your federal income tax liability is af-
ington, and Wisconsin. See Pub. 555 for more information
fected by your participation in the transaction. You may have
about community property laws.
to pay a penalty if you are required to file Form 8886 but don't
do so. You also may have to pay interest and penalties on any
Estimated Tax
reportable transaction understatements. For more information
If you had to make estimated tax payments for 2018, and you
on reportable transactions, see the Instructions for Form 8886.
underpaid your estimated tax, you won't be charged a penalty if
Farm Owned and Operated By Spouses
both of the following apply.
•
Your gross farming or fishing income for 2017 or 2018 is
If you and your spouse jointly own and operate a farm as an
at least two-thirds of your gross income, and
unincorporated business and share in the profits and losses, you
•
You file your 2018 tax return and pay the tax due by
can be taxed as a partnership and file Form 1065, or you each
March 1, 2019.
can file Schedule F (Form 1040) as a qualified joint venture.
For details, see chapter 15 of Pub. 225.
Qualified Joint Venture
If you and your spouse each materially participate as the only
members of a jointly owned and operated farm, and you file a
joint return for the tax year, you can elect to be treated as a
qualified joint venture instead of a partnership. This election in
most cases won't increase the total tax owed on the joint return,
F-2
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
the LLC's legal name) if you are required to file employment
Filers of Forms 1041 and 1065. Don't complete the block la-
tax returns and certain excise tax returns. However, you should
beled “Social security number (SSN).” Instead, enter the em-
enter on line D only the EIN issued to you and in your
ployer identification number (EIN) issued to the estate, trust, or
name as the sole proprietor of your farming business. If you
partnership on line D.
don't have such an EIN, leave line D blank. Don't enter on line
D the EIN issued to the LLC.
Line B
Single-member limited liability companies (LLCs) with em-
On line B, enter one of the 14 principal agricultural activity co-
ployees. Single-member LLCs that are disregarded as entities
des listed in Part IV on page 2 of Schedule F (Form 1040). Se-
separate from their owner for federal income tax purposes are
lect the code that best describes the source of most of your in-
required to file employment tax returns using the LLC's name
come.
and EIN rather than the LLC owner's name and EIN. For more
information, see the Instructions for Form SS-4.
Line C
Filers of Forms 1041 and 1065. Enter on line D the EIN is-
sued to the estate, trust, or partnership.
If you use the cash method, check the box for “Cash.” Com-
plete Schedule F (Form 1040), Parts I and II. In most cases, re-
Line E
port income in the year in which you actually or constructively
received it and deduct expenses in the year you paid them.
However, if the payment of an expenditure creates an intangi-
Material participation. For the definition of material partici-
ble asset (such as prepaid expense) having a useful life that ex-
pation for purposes of the passive activity rules, see the In-
tends beyond 12 months or the end of the next tax year, it may
structions for Schedule C (Form 1040), line G. If you meet any
not be deductible or may be deductible only in part for the year
of the material participation tests described in those instruc-
of the payment. See chapter 2 of Pub. 225.
tions, check the “Yes” box.
If you use an accrual method, check the box for “Accrual.”
If you are a retired or disabled farmer, you are treated as
Complete Schedule F (Form 1040), Parts II, III, and Part I,
materially participating in a farming business if you materially
line 9. Generally, report income in the year in which you
participated 5 or more of the 8 years preceding your retirement
earned it and deduct expenses in the year you incurred them,
or disability. Also, a surviving spouse is treated as materially
even if you didn't pay them in that year. Accrual basis taxpay-
participating in a farming activity if he or she actively manages
ers are put on a cash basis for deducting business expenses ow-
the farm and the real property used for farming meets the estate
ed to a related cash-basis taxpayer. Other rules determine the
tax rules for special valuation of farm property passed from a
timing of deductions based on economic performance. See Pub.
qualifying decedent.
538.
Check the “No” box if you didn't materially participate. If
Farming syndicates. Farming syndicates can't use the cash
you checked “No” and you have a loss from this business, see
method of accounting. A farming syndicate may be a partner-
Limit on passive losses, next. If you have a profit from this
ship, LLC, S corporation, or any other enterprise other than a C
business activity but have current year losses from other pas-
corporation if:
sive activities or prior year unallowed passive activity losses,
•
The interests in the business have at any time been of-
see the Instructions for Form 8582.
fered for sale in a way that would require registration with any
Limit on passive losses. If you checked the “No” box and you
federal or state agency, or
have a loss from this business, you may have to use Form 8582
•
More than 35% of the losses during any tax year are allo-
to figure your allowable loss, if any, to enter on Schedule F
cable to limited partners or limited entrepreneurs. A limited
(Form 1040), line 34. In most cases, you can deduct losses
partner is one who can lose only the amount invested or re-
from passive activities only to the extent of income from pas-
quired to be invested in the partnership. A limited entrepreneur
sive activities. For details, see Pub. 925.
is a person who doesn't take any active part in managing the
business.
Line F
Line D
If you made any payments in 2018 that would require you to
file any Forms 1099, check the “Yes” box. Otherwise, check
Enter on line D the employer identification number (EIN) that
the “No” box. See the 2018 General Instructions for Certain In-
was issued to you on Form SS-4. Don't enter your SSN. Don't
formation Returns if you are unsure whether you are required
enter another taxpayer's EIN (for example, from any Forms
to file any Forms 1099. Also see the separate specific instruc-
1099-MISC that you received). If you don't have an EIN,
tions for each Form 1099.
leave line D blank.
You need an EIN only if you have a qualified retirement
plan or are required to file employment, excise, alcohol, tobac-
co, 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.
F-3
Generally, you must file Form 1099-MISC if you paid
consider the amounts shown on Form 1099-K, Payment Card
at least $600 in rents, services, prizes, medical and
and Third-Party Network Transactions, along with all other
TIP
health care payments, and other income payments.
amounts received, when calculating gross receipts. (See
The Guide to Information Returns in the 2018 General Instruc-
Understanding your 1099K
on IRS.gov.)
tions for Certain Information Returns has more information,
Lines 3a and 3b
including the due dates for the various information returns.
If you received distributions from a cooperative in 2018, you
should receive a Form 1099-PATR. On line 3a, show your total
Part I. Farm Income—Cash
distributions from cooperatives. This includes patronage divi-
Method
dends, nonpatronage distributions, per-unit retain allocations,
and redemptions of nonqualified written notices of allocation
and per-unit retain certificates.
In Part I, show income received for items listed on lines 1
Show patronage dividends received in cash and the dollar
through 8. In most cases, include both the cash actually or con-
amount of qualified written notices of allocation. If you re-
structively received and the fair market value of goods or other
ceived property as patronage dividends, report the fair market
property received for these items. Income is constructively re-
value of the property as income. Include cash advances re-
ceived when it's credited to your account or set aside for you to
ceived from a marketing cooperative. If you received per-unit
use.
retains in cash, show the amount of cash. If you received quali-
If you ran the farm yourself and received rents based on
fied per-unit retain certificates, show the stated dollar amount
crop shares or farm production, report these rents as income on
of the certificates.
line 2.
Don't include as income on line 3b patronage dividends
Sales of livestock because of weather-related conditions. If
from buying personal or family items, capital assets, or depre-
you sold livestock because of drought, flood, or other weath-
ciable assets. Enter these amounts on line 3a only. Because you
er-related conditions, you can elect to report the income from
don't report patronage dividends from these items as income,
the sale in the year after the year of sale if all of the following
you must subtract the amount of the dividend from the cost or
apply.
other basis of these items.
•
Your main business is farming.
•
Lines 4a and 4b
You can show that you sold the livestock only because of
weather-related conditions.
•
Enter on line 4a the total of the following amounts.
Your area qualified for federal aid.
•
Price loss coverage payments.
See chapter 3 of Pub. 225 for details.
•
Agriculture risk coverage payments.
Chapter 11 bankruptcy. If you were a debtor in a chapter 11
•
Market Facilitation Program payments.
bankruptcy case during 2018, see Chapter 11 Bankruptcy Ca-
•
Market gain from the repayment of a secured Commodity
ses in the Instructions for Form 1040 (under Income) and the
Credit Corporation (CCC) loan for less than the original loan
Instructions for Schedule SE (Form 1040).
amount.
•
Forms 1099 or CCC-1099-G. If you received Forms 1099 or
Diversion payments.
•
CCC-1099-G showing amounts paid to you, first determine if
Cost-share payments (sight drafts).
•
the amounts are to be included with farm income. Then use the
Payments in the form of materials (such as fertilizer or
following chart to determine where to report the income on
lime) or services (such as grading or building dams).
Schedule F (Form 1040). Include the Form 1099 or
These amounts are government payments you received and
CCC-1099-G amounts in the total amount reported on that line.
are usually reported to you on Form 1099-G. You also may re-
ceive Form CCC-1099-G from the Department of Agriculture
Where to
showing the amounts and types of payments made to you.
Form
report
On line 4b, report only the taxable amount. For example,
1099-PATR
Line 3a
. . . . . . . . . . . . . . . . . . . . . . .
don't report the market gain shown on Form CCC-1099-G on
1099-A
Line 5b
. . . . . . . . . . . . . . . . . . . . . . . . .
line 4b if you elected to report CCC loan proceeds as income in
1099-MISC for crop insurance
Line 6a
. . . . . . . . . . . .
the year received (see Lines 5a Through 5c, next). No gain re-
1099-G or CCC-1099-G
•
sults from redemption of the commodity because you previous-
for disaster payments
Line 6a
. . . . . . . . . . . . .
•
ly reported the CCC loan proceeds as income. You are treated
for other agricultural program payments
Line 4a
. .
as repurchasing the commodity for the amount of the loan re-
payment. However, if you didn't report the CCC loan proceeds
under the election, you must report the market gain on line 4b.
You may receive Form 1099-MISC for other types of in-
come. In this case, report it on whichever line best describes
Lines 5a Through 5c
the income. For example, if you receive a Form 1099-MISC for
custom farming work, include this amount on line 7. In most
cases, your business income will be in the form of cash,
Commodity Credit Corporation (CCC) loans. In most ca-
checks, and debit/credit card payments. Therefore, you should
ses, you don't report CCC loan proceeds as income. However,
F-4
•
if you pledge part or all of your production to secure a CCC
Any amount included in income from line 2 of Form
loan, you can elect to report the loan proceeds as income in the
6478, Biofuel Producer Credit.
•
year you receive them. If you make this election (or made the
Any amount included in income from line 8 of Form
election in a prior year), report loan proceeds you received in
8864, Biodiesel and Renewable Diesel Fuels Credit.
•
2018 on line 5a. Attach a statement to your return showing the
The amount of credit for federal tax paid on fuels claimed
details of the loan(s). See chapter 3 of Pub. 225.
on your 2017 Form 1040. For information on including the
credit in income, see chapter 2 of Pub. 510.
Forfeited CCC loans. Include the full amount forfeited on
•
Any recapture of excess depreciation on any listed prop-
line 5b, even if you reported the loan proceeds as income. This
erty, including any section 179 expense deduction, if the busi-
amount may be reported to you on Form 1099-A.
ness use percentage of that property decreased to 50% or less
If you didn't elect to report the loan proceeds as income, al-
in 2018. Use Part IV of Form 4797 to figure the recapture. See
so include the forfeited amount on line 5c.
the Instructions for Schedule C (Form 1040), line 13, for the
If you did elect to report the loan proceeds as income, you
definition of listed property.
•
generally won't have an entry on line 5c. But if the amount for-
The inclusion amount on leased listed property (other
feited is different from your basis in the commodity, you may
than vehicles) when the business use percentage drops to 50%
have an entry on line 5c.
or less. See chapter 5 of Pub. 946 to figure the amount.
•
Any recapture of the deduction or credit for clean-fuel ve-
See chapter 3 of Pub. 225 for details on the tax consequen-
hicle refueling property or alternative fuel vehicle refueling
ces of electing to report CCC loan proceeds as income or for-
property used in your farming business. For details on how to
feiting CCC loans.
figure recapture, see Regulations section 1.179A-1.
Lines 6a Through 6d
•
Any income from breeding fees, or fees from renting
teams, machinery, or land that isn't reported on Schedule E
In most cases, you must report crop insurance proceeds in the
(Form 1040) or Form 4835.
year you receive them. Federal crop disaster payments are trea-
•
The gain or loss on the sale of commodity futures con-
ted as crop insurance proceeds. However, if 2018 was the year
tracts if the contracts were made to protect you from price
of damage, you can elect to include certain proceeds in income
changes. These are a form of business insurance and are con-
for 2019. To make this election, check the box on line 6c and
sidered hedges. If you had a loss in a closed futures contract,
attach a statement to your return. See chapter 3 of Pub. 225 for
enclose the amount of the loss in parentheses.
a description of the proceeds for which an election can be made
For property acquired and hedging positions estab-
and for what you must include in your statement.
!
lished, you must clearly identify on your books and re-
If you elect to defer any eligible crop insurance proceeds,
cords both the hedging transaction and the item(s) or
CAUTION
you must defer all such crop insurance proceeds (including fed-
aggregate risk being hedged.
eral crop disaster payments) from a single trade or business.
Purchase or sales contracts aren't true hedges if they offset
Enter on line 6a the total crop insurance proceeds you re-
losses that already occurred. If you bought or sold commodity
ceived in 2018, even if you elect to include them in income for
futures with the hope of making a profit due to favorable price
2019.
changes, report the profit or loss on Form 6781 instead of this
Enter on line 6b the taxable amount of the proceeds you re-
line.
ceived in 2018. Don't include proceeds you elect to include in
income for 2019.
Part II. Farm Expenses
Enter on line 6d the amount, if any, of crop insurance pro-
ceeds you received in 2017 and elected to include in income
for 2018.
Don't deduct the following.
•
Personal or living expenses (such as taxes, insurance, or
Line 8
repairs on your home) that don't produce farm income.
•
Expenses of raising anything you or your family used.
Enter on line 8 income not otherwise reportable on lines 1
•
The value of animals you raised that died.
through 7. This includes the following types of income.
•
Inventory losses.
•
Illegal federal irrigation subsidies. See chapter 3 of Pub.
•
Personal losses.
225.
•
Bartering income.
If you were repaid for any part of an expense during the
•
Income from cancellation of debt. In most cases, if a debt
same year, you must subtract the amount you were repaid from
is canceled or forgiven, you must include the canceled amount
the deduction.
in income. If a federal agency, financial institution, or credit
union canceled or forgave a debt you owed of $600 or more, it
Capitalizing costs to property produced and property ac-
should send you a Form 1099-C, or similar statement, by Janu-
quired for resale. If you produced real or tangible personal
ary 31, 2019, showing the amount of debt canceled in 2018.
property or acquired property for resale, you generally must
However, you may be able to exclude the canceled debt from
capitalize certain expenses to your inventory or other property.
income. See Pub. 4681 for details.
These expenses include the direct costs of the property and any
•
State gasoline or fuel tax refunds you received in 2018.
indirect costs properly allocable to that property.
F-5
