U.S. Individual Income Tax Return

Department of the Treasury
Internal Revenue Service

2010 Instructions for Schedule F
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form 1040,
1040NR, 1041, 1065, or 1065-B.
Profit or Loss
Your farming activity may subject you to state and local taxes and other requirements
such as business licenses and fees. Check with your state and local governments for more
From Farming
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 otherwise noted.

General Instructions

• Form 8903 to take a deduction for income from domestic production activities.
Single-member limited liability company
(LLC). Generally, a single-member do-

What’s New

Other Schedules and Forms
You May Have To File
• Schedule E, Part I, to report rental in-

Increase in section 179 expense. You may

now deduct up to $500,000 of the cost of
section 179 property placed in service in
2010. This deduction is phased out if the
cost of the property exceeds $2,000,000.
The cost of certain qualified real property
placed in service in 2010 may also be deducted but is limited to $250,000. For more
details, see Pub. 946.
Extension of special allowance. The spe-

cial first-year depreciation allowance has
been extended to property placed in service
in 2010. See Pub. 946 for details on which
property is eligible for the special allowance.
Increased deduction for start-up costs. If

your farming business began in 2010, you
can deduct up to $5,000 of certain business
start-up costs paid or incurred after October
22, 2004, in tax years before 2010, and up
to $10,000 of certain business start-up costs
paid or incurred in 2010. See page F-6 for
more details.
Standard mileage rate. The business stan-

dard mileage rate for 2010 decreased to 50
cents per mile. See page F-5 for more details.
New credit for small employer health
insurance premiums. If your line 17 ex-

penses include the cost of providing health
insurance coverage to your employees, you
must reduce your expenses by the amount
of any credit determined on Form 8941.
See page F-5 and Form 8941 and its instructions.
Limitation on excess farm losses. If you

received certain subsidies in 2010, your
losses may be reduced or eliminated. See
page F-7.

Reportable transaction penalties limited.

The penalties for failure to disclose a reportable transaction have changed. See
Pub. 550 and the Instructions for Form
8886 for more details.

come from pastureland based on a flat
charge. However, report on Schedule F,
line 10, pasture income received from taking care of someone else’s livestock. Also
use Schedule E, Part I, to report farm rental
income and expenses of a trust or estate
based on crops or livestock produced by a
tenant.
• Schedule J to figure your tax by averaging your farm income over the previous 3
years. Doing so may reduce your tax.
• Schedule SE to pay self-employment
tax on income from your farming business.
• Form 3800 to claim any general business credits.
• Form 4562 to claim depreciation (including the special allowance) on assets
placed in service in 2010, to claim amortization that began in 2010, to make an election under section 179 to expense certain
property, or to report information on vehicles and other listed property.
• Form 4684 to report a casualty or theft
gain or loss involving farm business property, including purchased livestock held for
draft, breeding, sport, or dairy purposes.
See Pub. 225 for more information on how
to report various farm losses, such as losses
due to death of livestock or damage to
crops or other farm property.
• Form 4797 to report sales, exchanges,
or involuntary conversions (other than
from a casualty or theft) of certain farm
property. Also use this form to report sales
of livestock held for draft, breeding, sport,
or dairy purposes.
• Form 4835 to report rental income
based on crop or livestock shares produced
by a tenant if you did not materially participate in the management or operation of a
farm. This income is not subject to self-employment tax. See Pub. 225.
• Form 6198 to figure your allowable
loss if you have a business loss and you
have amounts invested in the business for
which you are not at risk.
• Form 8582 to figure your deductible
loss from passive activities.
• Form 8824 to report like-kind exchanges.

F-1
Cat. No. 17152R

mestic LLC is not treated as a separate entity for federal income tax purposes. If you
are the sole member of a domestic LLC
engaged in the business of farming, file
Schedule F. However, you can elect to treat
a domestic LLC as a corporation. See Form
8832 for details on the election.
Heavy highway vehicle use tax. If you use
certain highway trucks, truck-trailers, tractor trailers, or buses in your farming business, you may have to pay a federal
highway motor vehicle use tax. See the Instructions for Form 2290 to find out if you
owe this tax.
Information returns. You may have to file
information returns for wages paid to employees, certain payments of fees and other
nonemployee compensation, interest, rents,
royalties, real estate transactions, annuities,
and pensions. You may also have to file an
information return if you sold $5,000 or
more of consumer products to a person on a
buy-sell, deposit-commission, or other similar basis for resale. For details, see the
2010 General Instructions for Certain Information Returns (Forms 1098, 1099,
3921, 3922, 5498, and W-2G).
If you received cash of more than
$10,000 in one or more related transactions
in your farming business, you may have to
file Form 8300. For details, see Pub. 1544.
Reportable transaction disclosure statement. If you entered into a reportable

transaction in 2010, you must file Form
8886 to disclose information if your federal
income tax liability is affected by your participation in the transaction. You may have
to pay a penalty if you are required to file
Form 8886 but do not do so. You may also
have to pay interest and penalties on any
reportable transaction understatements. For
more information on reportable transactions, see Reportable Transaction Disclosure Statement in the instructions for
Schedule C.

Husband-Wife Farm
If you and your spouse jointly own and
operate a farm as an unincorporated business and share in the profits and losses, you
each can be taxed as a partnership and file
Form 1065, or you each can file Schedule F
as a qualified joint venture.

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 will not increase the total tax owed on
the joint return, but it does give each of you
credit for social security earnings on which
retirement benefits are based and for Medicare coverage without filing a partnership
return. For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for line E
on this page.
Making the election. To make this elec-

tion, you must divide all items of income,
gain, loss, deduction, and credit attributable
to the farming business between you and
your spouse in accordance with your respective interests in the venture. Each of
you must file a separate Schedule F. On
each line of your separate Schedule F, you
must enter your share of the applicable income, deduction, or loss. Each of you must
also file a separate Schedule SE to pay
self-employment tax, as applicable.
As long as you remain qualified, your
election cannot be revoked without IRS
consent.
For more information on qualified joint
ventures, go to IRS.gov. Enter ‘‘QJV election’’ in the search box and select ‘‘Benefits of Qualified Joint Ventures for Family
Businesses.’’

Exception —Community Income
If you and your spouse wholly own an unincorporated farming business as community property under the community
property laws of a state, foreign country, or
U.S. possession, the income and deductions
are reported as follows.
• If only one spouse participates in the
business, all of the income from that business is the self-employment earnings of the
spouse who carried on the business.
• If both spouses participate, the income
and deductions are allocated to the spouses
based on their distributive shares.
• If either or both you and your spouse
are partners in a partnership, see Pub. 541.
• If you and your spouse elected to treat
the business as a qualifying joint venture,
see Husband-Wife Farm on page F-1.
The only states with community property laws are Arizona, California, Idaho,
Louisiana, Nevada, New Mexico, Texas,
Washington, and Wisconsin. A change in
your reporting position will be treated as a
conversion of the entity.

Estimated Tax
If you had to make estimated tax payments
for 2010 and you underpaid your estimated
tax, you will not be charged a penalty if
both of the following apply.
• Your gross farming or fishing income
for 2009 or 2010 is at least two-thirds of
your gross income.
• You file your 2010 tax return and pay
the tax due by March 1, 2011.
For details, see chapter 15 of Pub. 225.

Specific Instructions
Filers of Forms 1041, 1065, and 1065-B.

Do not complete the block labeled “Social
security number (SSN).” Instead, enter the
employer identification number (EIN) issued to the estate, trust, or partnership on
line D.

Line B
On line B, enter one of the 14 principal
agricultural activity codes listed in Part IV
on page 2 of Schedule F. Select the code
that best describes the source of most of
your income.

or firearms returns, or are a payer of gambling winnings. If you need an EIN, see the
Instructions for Form SS-4.
Single-member LLCs. If you are the sole

owner of an LLC that is not treated as a
separate entity for federal income tax purposes, 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 tax returns and certain excise tax returns. However, you should enter on line
D only the EIN issued to you and in your
name as the sole proprietor of your
farming business. If you do not have such
an EIN, leave line D blank. Do not enter on
line D the EIN issued to the LLC.
Single-member limited liability companies
(LLCs) with employees. Single-member

Line C
If you use the cash method, check box 1,
“Cash.” Complete Schedule F, Parts I and
II. In most cases, report 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 asset having a
useful life that extends substantially beyond the close of the year, it may not be
deductible or may be deductible only in
part for the year of the payment. See chapter 2 of Pub. 225.
If you use an accrual method, check box
2, “Accrual.” Complete Schedule F, Parts
II, III, and Part I, line 11. Generally, report
income in the year in which you earned it
and deduct expenses in the year you incurred them, even if you did not pay them
in that year. Accrual basis taxpayers are put
on a cash basis for deducting business expenses owed to a related cash-basis taxpayer. Other rules determine the timing of
deductions based on economic performance. See Pub. 538.
Farming syndicates. Farming syndicates
cannot use the cash method of accounting.
A farming syndicate may be a partnership,
any other noncorporate group, or an S corporation if:
• The interests in the business have at
any time been offered for sale in a way that
would require registration with any federal
or state agency, or
• More than 35% of the loss during any
tax year is shared by limited partners or
limited entrepreneurs. A limited partner is
one who can lose only the amount invested
or required to be invested in the partnership. A limited entrepreneur is a person
who does not take any active part in managing the business.

Line D
Enter on line D the employer identification
number (EIN) that was issued to you. Do
not enter your SSN. Do not enter another
taxpayer’s EIN (for example, from any
Forms 1099-MISC that you received). If
you do not have an EIN, leave line D
blank.
You need an EIN only if you have a
qualified retirement plan or are required to
file employment, excise, alcohol, tobacco,

F-2

LLCs that are disregarded as entities separate from their owner for federal income
tax purposes are required to file employment tax returns using the LLC’s name and
employer identification number (EIN)
rather than the LLC owner’s name and
EIN. Single-member LLCs not previously
needing an EIN may need to obtain an EIN
for the payment and reporting of these
taxes. For more information, see the Instructions for Form SS-4.
Filers of Forms 1041, 1065, and 1065-B.

Enter on line D the EIN issued to the estate,
trust, or partnership.

Line E
Material participation. For the definition

of material participation for purposes of the
passive activity rules, see the instructions
for Schedule C, line G, on page C-3. If you
meet any of the material participation tests
described in those instructions, check the
“Yes” box.
If you are a retired or disabled farmer,
you are treated as materially participating
in a farming business if you materially participated 5 or more of the 8 years preceding
your retirement or disability. Also, a surviving spouse is treated as materially participating in a farming activity if he or she
actively manages the farm and the real
property used for farming meets the estate
tax rules for special valuation of farm property passed from a qualifying decedent.
Check the “No” box if you did not materially participate. If you checked “No” and
you have a loss from this business, see
Limit on passive losses below. If you have
a profit from this business activity but have
current year losses from other passive activities or prior year unallowed passive activity losses, see the Instructions for Form
8582.
Limit on passive losses. If you checked the

“No” box and you have a loss from this
business, you may have to use Form 8582
to figure your allowable loss, if any, to
enter on Schedule F, line 36. In most cases,
you can deduct losses from passive activities only to the extent of income from passive activities. For details, see Pub. 925.

Part I. Farm
Income—Cash
Method
In Part I, show income received for items
listed on lines 1 through 10. In most cases,
include both the cash actually or constructively received and the fair market value of
goods or other property received for these
items. Income is constructively received
when it is credited to your account or set
aside for you to use. However, direct payments or counter-cyclical payments received under the Farm Security and Rural
Investment Act of 2002 are required to be
included in income only in the year of actual receipt.
If you ran the farm yourself and received rents based on crop shares or farm
production, report these rents as income on
line 4.
Sales of livestock because of
weather-related conditions. If you sold

livestock because of drought, flood, or
other weather-related conditions, you can
elect to report the income from the sale in
the year after the year of sale if all of the
following apply.
• Your main business is farming.
• You can show that you sold the livestock only because of weather-related conditions.
• Your area qualified for federal aid.
See chapter 3 of Pub. 225 for details.
If you were a
debtor in a chapter 11 bankruptcy case during 2010, see Chapter 11 Bankruptcy Cases
under Income in the instructions for Form
1040 and page SE-2 of the instructions for
Schedule SE (Form 1040).
Chapter 11 bankruptcy.

Forms 1099 or CCC-1099-G. If you re-

ceived Forms 1099 or CCC-1099-G showing amounts paid to you, first determine if
the amounts are to be included with farm
income. Then use the following chart to
determine where to report the income on
Schedule F. Include the Form 1099 or
CCC-1099-G amounts in the total amount
reported on that line.
Where to
report

Form

1099-PATR . . . . . . . . . .
1099-A . . . . . . . . . . . . . .
1099-MISC for crop
insurance . . . . . . . . . . . .
1099-G or CCC-1099-G
• for disaster payments
• for other agricultural
program payments . .

..
..

Line 5a
Line 7b

..

Line 8a

..

Line 8a

..

Line 6a

You may also receive Form 1099-MISC
for other types of income. In this case, report it on whichever line best describes the
income. For example, if you received a
Form 1099-MISC for custom farming
work, include this amount on line 9, “Custom hire (machine work) income.”

Lines 5a and 5b

Lines 7a Through 7c

If you received distributions from a cooperative in 2010, you should receive a Form
1099-PATR. On line 5a, show your total
distributions from cooperatives. This includes patronage dividends, nonpatronage
distributions, per-unit retain allocations,
and redemptions of nonqualified written
notices of allocation and per-unit retain certificates.

Commodity Credit Corporation (CCC)
loans. In most cases, you do not report

Show patronage dividends received in
cash and the dollar amount of qualified
written notices of allocation. If you received property as patronage dividends, report the fair market value of the property as
income. Include cash advances received
from a marketing cooperative. If you received per-unit retains in cash, show the
amount of cash. If you received qualified
per-unit retain certificates, show the stated
dollar amount of the certificates.
Do not include as income on line 5b
patronage dividends from buying personal
or family items, capital assets, or depreciable assets. Enter these amounts on line 5a
only. Because you do not report patronage
dividends from these items as income, you
must subtract the amount of the dividend
from the cost or other basis of these items.

Lines 6a and 6b
Enter on line 6a the total of the following
amounts.
• Direct payments.
• Counter-cyclical payments.
• Price support payments.
• Market gain from the repayment of a
secured Commodity Credit Corporation
(CCC) loan for less than the original loan
amount.
• Diversion payments.
• Cost-share payments (sight drafts).
• Payments in the form of materials
(such as fertilizer or lime) or services (such
as grading or building dams).
These amounts are government payments
you received and are usually reported to
you on Form 1099-G. You may also receive Form CCC-1099-G from the Department of Agriculture showing the amounts
and types of payments made to you.
On line 6b, report only the taxable
amount. For example, do not report the
market gain shown on Form CCC-1099-G
on line 6b if you elected to report CCC loan
proceeds as income in the year received
(see Lines 7a Through 7c next). No gain
results from redemption of the commodity
because you previously reported the CCC
loan proceeds as income. You are treated as
repurchasing the commodity for the
amount of the loan repayment. However, if
you did not report the CCC loan proceeds
under the election, you must report the market gain on line 6b.
If you received a direct or counter-cyclical payment in 2010, your farm losses may
be reduced or eliminated. See page F-7 for
more details.

F-3

CCC loan proceeds as income. However, if
you pledge part or all of your production to
secure a CCC loan, you can elect to report
the loan proceeds as income in the year you
receive them, instead of the year you sell
the crop. If you make this election (or made
the election in a prior year), report loan
proceeds you received in 2010 on line 7a.
Attach a statement to your return showing
the details of the loan(s).
Forfeited CCC loans. Include the full
amount forfeited on line 7b, even if you
reported the loan proceeds as income. This
amount may be reported to you on Form
1099-A.
If you did not elect to report the loan
proceeds as income, also include the forfeited amount on line 7c.
If you did elect to report the loan proceeds as income, you generally will not
have an entry on line 7c. But if the amount
forfeited is different from your basis in the
commodity, you may have an entry on
line 7c.
See chapter 3 of Pub. 225 for details on
the tax consequences of electing to report
CCC loan proceeds as income or forfeiting
CCC loans.
If you received a CCC loan in 2010,
your farm losses may be reduced or eliminated. See page F-7 for more details.

Lines 8a Through 8d
In most cases, you must report crop insurance proceeds in the year you receive them.
Federal crop disaster payments are treated
as crop insurance proceeds. However, if
2010 was the year of damage, you can elect
to include certain proceeds in income for
2011. To make this election, check the box
on line 8c and attach a statement to your
return. See chapter 3 of Pub. 225 for a
description of the proceeds for which an
election can be made and for what you must
include in your statement.
In most cases, if you elect to defer any
eligible crop insurance proceeds, you must
defer all such crop insurance proceeds (including federal crop disaster payments).
Enter on line 8a the total crop insurance
proceeds you received in 2010, even if you
elect to include them in income for 2011.
Enter on line 8b the taxable amount of
the proceeds you received in 2010. Do not
include proceeds you elect to include in
income for 2011.
Enter on line 8d the amount, if any, of
crop insurance proceeds you received in
2009 and elected to include in income for
2010.

Line 10
Use this line to report income not shown on
lines 1 through 9, such as the following.
• Illegal federal irrigation subsidies. See
chapter 3 of Pub. 225.
• Bartering income.

• Income from cancellation of debt. In
most cases, if a debt is canceled or forgiven, you must include the canceled
amount in income. If a federal agency, financial institution, or credit union canceled
or forgave a debt you owed of $600 or
more, it should send you a Form 1099-C, or
similar statement, by January 31, 2011,
showing the amount of debt canceled in
2010. However, you may be able to exclude the canceled debt from income. See
Pub. 4681 for details.
• State gasoline or fuel tax refunds you
received in 2010.
• The amount of credit for alcohol and
cellulosic biofuel fuels claimed on Form
6478.
• The amount of credit for biodiesel and
renewable diesel fuels claimed on Form
8864.
• The amount of credit for federal tax
paid on fuels claimed on your 2009 Form
1040. For information on including the
credit in income, see chapter 2 of Pub. 510.
• Any recapture of excess depreciation
on any listed property, including any section 179 expense deduction, if the business
use percentage of that property decreased
to 50% or less in 2010. Use Part IV of Form
4797 to figure the recapture. See the instructions for Schedule C, line 13, for the
definition of listed property.
• The inclusion amount on leased listed
property (other than vehicles) when the
business use percentage drops to 50% or
less. See chapter 5 of Pub. 946 to figure the
amount.
• Any recapture of the deduction for
clean-fuel vehicles and clean-fuel vehicle
refueling property used in your farming
business. For details on how to figure recapture, see Regulations section 1.179A-1.
• Any income from breeding fees, or
fees from renting teams, machinery, or
land.
• The gain or loss on the sale of commodity futures contracts if the contracts
were made to protect you from price
changes. These are a form of business insurance and are considered hedges. If you
had a loss in a closed futures contract, enclose the amount of the loss in parentheses.
For property acquired and
hedging positions established,
you must clearly identify on
your books and records both the
hedging transaction and the item(s) or aggregate risk being hedged.
Purchase or sales contracts are not true
hedges if they offset losses that already occurred. If you bought or sold commodity
futures with the hope of making a profit due
to favorable price changes, report the profit
or loss on Form 6781 instead of this line.

Part II. Farm
Expenses
Do not deduct the following.

• Personal or living expenses (such as
taxes, insurance, or repairs on your home)
that do not produce farm income.
• Expenses of raising anything you or
your family used.
• The value of animals you raised that
died.
• Inventory losses.
• Personal losses.
If you were repaid for any part of an
expense, you must subtract the amount you
were repaid from the deduction.
Capitalizing costs of property. If you pro-

penses in the first tax year for which you
can make this election and by applying the
special rules, discussed later on this page.

In the case of a partnership or S
corporation, the election must
be made by the partner, shareholder, or member. This election cannot be made by tax shelters,
farming syndicates, partnerships, or corporations required to use the accrual method
of accounting under section 447 or
448(a)(3).

duced real or tangible personal property or
acquired property for resale, certain expenses must be included in inventory costs
or capitalized. These expenses include the
direct costs of the property and the share of
any indirect costs allocable to that property.
However, these rules generally do not apply to expenses of:
1. Producing any plant that has a
preproductive period of 2 years or less,
2. Raising animals, or
3. Replanting certain crops if they were
lost or damaged by reason of freezing temperatures, disease, drought, pests, or casualty.

Unless you obtain IRS consent, you
must make this election for the first tax year
in which you engage in a farming business
involving the production of property subject to the capitalization rules. You cannot
revoke this election without IRS consent.

Exceptions (1) and (2) do not
apply to tax shelters, farming
syndicates, partnerships, or corporations required to use the accrual method of accounting under section
447 or 448(a)(3).

For details, see Uniform Capitalization
Rules in chapter 6 of Pub. 225.

If you capitalize your expenses, do not
reduce your deductions on lines 12 through
34e by the capitalized expenses. Instead,
enter the total amount capitalized in parentheses on line 34f (to indicate a negative
amount) and enter “263A” in the space to
the left of the total. See Preproductive period expenses on page F-7 for details.
But you may be able to currently deduct
rather than capitalize the expenses of producing a plant with a preproductive period
of more than 2 years. See Election to deduct certain preproductive period expenses
next.
Election to deduct certain preproductive
period expenses. If the preproductive pe-

riod of any plant you produce is more than
2 years, you can elect to currently deduct
the expenses rather than capitalize them.
But you cannot make this election for the
costs of planting or growing citrus or almond groves incurred before the end of the
fourth tax year beginning with the tax year
you planted them in their permanent grove.
You are treated as having made the election
by deducting the preproductive period ex-

F-4

Special rules. If you make the election
to deduct preproductive expenses for
plants:
• Any gain you realize when disposing
of the plants is ordinary income up to the
amount of the preproductive expenses you
deducted, and
• The alternative depreciation rules apply to property placed in service in any tax
year your election is in effect.

Prepaid farm supplies. In most cases, if

you use the cash method of accounting and
your prepaid farm supplies are more than
50% of your other deductible farm expenses, your deduction for those supplies
may be limited. Prepaid farm supplies include expenses for feed, seed, fertilizer,
and similar farm supplies not used or consumed during the year. They also include
the cost of poultry that would be allowable
as a deduction in a later tax year if you were
to (a) capitalize the cost of poultry bought
for use in your farming business and deduct
it ratably over the lesser of 12 months or the
useful life of the poultry, and (b) deduct the
cost of poultry bought for resale in the year
you sell or otherwise dispose of it.
If the limit applies, you can deduct prepaid farm supplies that do not exceed 50%
of your other deductible farm expenses in
the year of payment. You can deduct the
excess only in the year you use or consume
the supplies (other than poultry, which is
deductible as explained above). For details
and exceptions to these rules, see chapter 4
of Pub. 225.
Whether or not this 50% limit applies,
your expenses for livestock feed paid during the year but consumed in the later year
may be subject to the rules explained later
in the line 18 instructions.

Line 12
You can deduct the actual expenses of operating your car or truck or take the standard mileage rate. You must use actual
expenses if you used your vehicle for hire
or you used five or more vehicles simultaneously in your farming business (such as
in fleet operations). You cannot use actual
expenses for a leased vehicle if you previously used the standard mileage rate for
that vehicle.
You can take the standard mileage rate
for 2010 only if you:
• Owned the vehicle and used the standard mileage rate for the first year you
placed the vehicle in service, or
• Leased the vehicle and are using the
standard mileage rate for the entire lease
period (except the period, if any, before
1998).
If you take the standard mileage rate:
• Multiply the number of business miles
driven by 50 cents, and
• Add to this amount your parking fees
and tolls, and enter the total on line 12.
Do not deduct depreciation, rent or lease
payments, or your actual operating expenses.
If you deduct actual expenses:
• Include on line 12 the business portion
of expenses for gasoline, oil, repairs, insurance, tires, license plates, etc., and
• Show depreciation on line 16 and rent
or lease payments on line 26a.
If you claim any car or truck expenses
(actual or the standard mileage rate), you
must provide the information requested on
Form 4562, Part V. Be sure to attach Form
4562 to your return.
For details, see chapter 4 of Pub. 463.

Line 14
Deductible conservation expenses generally are those that are paid to conserve soil
and water for land used in farming, to prevent erosion of land used for farming, or for
endangered species recovery. These expenses include (but are not limited to) costs
for the following.
• The treatment or movement of earth,
such as leveling, grading, conditioning, terracing, contour furrowing, and the restoration of soil fertility.
• The construction, control, and protection of diversion channels, drainage
ditches, irrigation ditches, earthen dams,
watercourses, outlets, and ponds.
• The eradication of brush.
• The planting of windbreaks.
• The achievement of site-specific management actions recommended in recovery
plans approved pursuant to the Endangered
Species Act of 1973.
These expenses can be deducted only if
they are consistent with a conservation plan
approved by the Natural Resources Conservation Service of the Department of Agriculture or a recovery plan approved
pursuant to the Endangered Species Act of
1973, for the area in which your land is

located. If no plan exists, the expenses must
be consistent with a plan of a comparable
state agency. You cannot deduct the expenses if they were paid or incurred for
land used in farming in a foreign country.
Do not deduct expenses you paid or incurred to drain or fill wetlands, or to prepare land for center pivot irrigation
systems.
Your deduction cannot exceed 25% of
your gross income from farming (excluding certain gains from selling assets such as
farm machinery and land). If your conservation expenses are more than the limit, the
excess can be carried forward and deducted
in later tax years. However, the amount
deductible for any one year cannot exceed
the 25% gross income limit for that year.
For details, see chapter 5 of Pub. 225.

Line 15
Enter amounts paid for custom hire or machine work (the machine operator furnished the equipment).
Do not include amounts paid for rental
or lease of equipment you operated yourself. Instead, report those amounts on line
26a.

Line 16
You can deduct depreciation of buildings,
improvements, cars and trucks, machinery,
and other farm equipment of a permanent
nature.
Do not deduct depreciation on your
home, furniture or other personal items,
land, livestock you bought or raised for resale, or other property in your inventory.
You can also elect under section 179 to
expense a portion of the cost of certain
property you bought in 2010 for use in your
farming business. The section 179 election
is made on Form 4562.
For information about depreciation and
the section 179 deduction, see Pub. 946 and
chapter 7 of Pub. 225. For details on the
special depreciation allowance, see chapter
3 of Pub. 946.
See the Instructions for Form 4562 for
information on when you must complete
and attach Form 4562.

Form 1040, line 29 (or on Form 1040NR,
line 29), the amount you paid for health
insurance on behalf of yourself, your
spouse, and dependents even if you do not
itemize your deductions. See the instructions for Form 1040, line 29, or Form
1040NR, line 29, for details.
You must reduce your line 17 deduction
by the amount of any credit for small employer health insurance premiums determined on Form 8941. See Form 8941 and
its instructions to determine which expenses are eligible for the credit.

Line 18
If you use the cash method, you cannot
deduct when paid the cost of feed your
livestock will consume in a later year unless all of the following apply.
• The payment was for the purchase of
feed rather than a deposit.
• The prepayment had a business purpose and was not made merely to avoid tax.
• Deducting the prepayment will not
materially distort your income.
If all of the above apply, you can deduct
the prepaid feed when paid, subject to the
overall limit for Prepaid farm supplies explained on page F-4. If all of the above do
not apply, you can deduct the prepaid feed
only in the year it is consumed.

Line 20
Do not include the cost of transportation
incurred in purchasing livestock held for
resale as freight paid. Instead, add these
costs to the cost of the livestock and deduct
them when the livestock is sold.

Line 22
Deduct on this line premiums paid for farm
business insurance. Deduct on line 17
amounts paid for employee accident and
health insurance. Amounts credited to a reserve for self-insurance or premiums paid
for a policy that pays for your lost earnings
due to sickness or disability are not deductible. For details, see chapter 6 of Pub. 535.

Lines 23a and 23b
Interest allocation rules. The tax treatment

Line 17
Deduct contributions to employee benefit
programs that are not an incidental part of a
pension or profit-sharing plan included on
line 25. Examples are accident and health
plans, group-term life insurance, and dependent care assistance programs. If you
made contributions on your behalf as a
self-employed person to a dependent care
assistance program, complete Form 2441,
Parts I and III, to figure your deductible
contributions to that program.
Contributions you made on your behalf
as a self-employed person to an accident
and health plan or for group-term life insurance are not deductible on Schedule F.
However, you may be able to deduct on

F-5

of interest expense differs depending on its
type. For example, home mortgage interest
and investment interest are treated differently. “Interest allocation” rules require
you to allocate (classify) your interest expense so it is deducted (or capitalized) on
the correct line of your return and receives
the right tax treatment. These rules could
affect how much interest you are allowed to
deduct on Schedule F.
In most cases, you allocate interest expense by tracing how the proceeds of the
loan are used. See chapter 4 of Pub. 535 for
details.
If you paid interest on a debt secured by
your main home and any of the proceeds
from that debt were used in your farming

business, see chapter 4 of Pub. 535 to figure
the amount to include on lines 23a and 23b.
How to report. If you have a mortgage on
real property used in your farming business
(other than your main home), enter on line
23a the interest you paid for 2010 to banks
or other financial institutions for which you
received a Form 1098 (or similar statement). If you did not receive a Form 1098,
enter the interest on line 23b.
If you paid more mortgage interest than
is shown on Form 1098, see chapter 4 of
Pub. 535 to find out if you can deduct the
additional interest. If you can, include the
amount on line 23a. Attach a statement to
your return explaining the difference and
enter “See attached” in the margin next to
line 23a.
If you and at least one other person
(other than your spouse if you file a joint
return) were liable for and paid interest on
the mortgage and the other person received
the Form 1098, include your share of the
interest on line 23b. Attach a statement to
your return showing the name and address
of the person who received the Form 1098.
In the margin next to line 23b, enter “See
attached.”
Do not deduct interest you prepaid in
2010 for later years; include only the part
that applies to 2010.

Line 24
Enter the amounts you paid for farm labor.
Do not include amounts paid to yourself.
Reduce your deduction by the amounts
claimed on:
• Form 5884, Work Opportunity Credit,
line 2;
• Form 8844, Empowerment Zone and
Renewal Community Employment Credit,
line 2;
• Form 8845, Indian Employment
Credit, line 4; and
• Form 8932, Credit for Employer Differential Wage Payments, line 2.
Include the cost of boarding farm labor
but not the value of any products they used
from the farm. Include only what you paid
household help to care for farm laborers.

If you provided taxable fringe
benefits to your employees,
such as personal use of a car, do
not include in farm labor the
amounts you depreciated or deducted elsewhere.

Line 25
Enter your deduction for contributions to
employee pension, profit-sharing, or annuity plans. If the plan included you as a
self-employed person, enter contributions
made as an employer on your behalf on
Form 1040, line 28 (or on Form 1040NR,
line 28), not on Schedule F.
In most cases, you must file the applicable form listed next if you maintain a pension, profit-sharing, or other
funded-deferred compensation plan. The
filing requirement is not affected by
whether or not the plan qualified under the

Internal Revenue Code, or whether or not
you claim a deduction for the current tax
year. There is a penalty for failure to timely
file these forms.

Instead, treat these taxes as part of the cost
of the property.
• Other taxes not related to your farming business.

Form 5500-EZ. File this form if you have a

one-participant retirement plan that meets
certain requirements. A one-participant
plan is a plan that covers only you (or you
and your spouse).
Form 5500-SF. File this form if you have a

small plan (fewer than 100 participants in
most cases) that meets certain requirements.

Form 5500. File this form for a plan that

does not meet the requirements for filing
Form 5500-EZ or Form 5500-SF.
For details, see Pub. 560.

Lines 26a and 26b
If you rented or leased vehicles, machinery,
or equipment, enter on line 26a the business
portion of your rental cost. But if you
leased a vehicle for a term of 30 days or
more, you may have to reduce your deduction by an inclusion amount. See Leasing a
Car in chapter 4 of Pub. 463 to figure this
amount.
Enter on line 26b amounts paid to rent
or lease other property such as pasture or
farmland.

Line 27
Enter amounts you paid for incidental repairs and maintenance of farm buildings,
machinery, and equipment that do not add
to the property’s value or appreciably prolong its life.
Do not deduct repairs or maintenance on
your home.

Line 31
You can deduct the following taxes on this
line.
• Real estate and personal property
taxes on farm business assets.
• Social security and Medicare taxes
you paid to match what you are required to
withhold from farm employees’ wages.
• Federal unemployment tax.
• Federal highway use tax.
• Contributions to state unemployment
insurance fund or disability benefit fund if
they are considered taxes under state law.
Do not deduct the following taxes on
this line.
• Federal income taxes, including your
self-employment tax. However, you can
deduct one-half of your self-employment
tax on Form 1040, line 27 or Form
1040NR, line 27.
• Estate and gift taxes.
• Taxes assessed for improvements,
such as paving and sewers.
• Taxes on your home or personal use
property.
• State and local sales taxes on property
purchased for use in your farming business.

F-6

Line 32
Enter amounts you paid for gas, electricity,
water, and other utilities for business use on
the farm. Do not include personal utilities.
You cannot deduct the base rate (including
taxes) of the first telephone line into your
residence, even if you use it for your farming business. But you can deduct expenses
you paid for your farming business that are
more than the cost of the base rate for the
first phone line. For example, if you had a
second phone line, you can deduct the business percentage of the charges for that line,
including the base rate charges.

Lines 34a Through 34f
Include all ordinary and necessary farm expenses not deducted elsewhere on Schedule
F, such as advertising, office supplies, etc.
Do not include fines or penalties paid to a
government for violating any law.
At-risk loss deduction. Any loss from this

activity that was not allowed as a deduction
last year because of the at-risk rules is
treated as a deduction allocable to this activity in 2010. However, for the loss to be
deductible, the amount “at risk” must be
increased.
Bad debts. See chapter 10 of Pub. 535.

Business start-up costs. If your farming

business began in 2010, you can elect to
deduct up to $5,000 of certain business
start-up costs paid or incurred after October
22, 2004, in tax years before 2010, and up
to $10,000 of certain business start-up costs
paid or incurred in tax years beginning in
2010. The $5,000 limit is reduced (but not
below zero) by the amount by which your
start-up costs exceed $50,000, and the
$10,000 limit is reduced (but not below
zero) by the amount by which your start-up
costs exceed $60,000. Your remaining
start-up costs can be amortized over a
180-month period, beginning with the
month the farming business began. For details, see chapters 4 and 7 of Pub. 225. For
amortization that begins in 2010, you must
complete and attach Form 4562.
Business use of your home. You may be

able to deduct certain expenses for business
use of your home, subject to limitations.
Use the worksheet in Pub. 587 to figure
your allowable deduction. Do not use Form
8829.
Forestation and reforestation costs. Refor-

estation costs are generally capital expenditures. However, for each qualified timber
property, you can elect to expense up to
$10,000 ($5,000 if married filing separately) of qualifying reforestation costs
paid or incurred in 2010.
You can elect to amortize the remaining
costs over 84 months. For amortization that
begins in 2010, you must complete and attach Form 4562.

The amortization election does not apply to trusts, and the expense election does
not apply to estates and trusts. For details
on reforestation expenses, see chapters 4
and 7 of Pub. 225.
Legal and professional fees. You can in-

clude on this line fees charged by accountants and attorneys that are ordinary and
necessary expenses directly related to your
farming business. Include fees for tax advice and for the preparation of tax forms
related to your farming business. Also include expenses incurred in resolving asserted tax deficiencies related to your
farming business.
Tools. You can deduct the amount you

determine the amount of your loss at risk
before entering the loss on line 36.
Community income. If you and your

spouse had community income and are filing separate returns, see page SE-2 of the
instructions for Schedule SE before figuring self-employment tax.
Earned income credit. If you have a net

profit on line 36, this amount is earned income and may qualify you for the earned
income credit if you meet certain conditions. See the instructions for Form 1040,
lines 64a and 64b, for details.
Conservation Reserve Program (CRP)
payments. If you received social security

Travel, meals, and entertainment. In most

retirement or disability benefits in addition
to CRP payments, the CRP payments are
not subject to self-employment tax. You
will deduct these payments from your net
farm profit or loss on line 1b of Schedule
SE. Do not make any adjustment on Schedule F.

Preproductive period expenses. If you had

Line 37

paid for tools that have a short life or cost a
small amount, such as shovels and rakes.

cases, you can deduct expenses for farm
business travel and 50% of your business
meals and entertainment. But there are exceptions and limitations. See the instructions for Schedule C, lines 24a and 24b.
preproductive period expenses in 2010 that
you are capitalizing, enter the total of these
expenses in parentheses on line 34f (to indicate a negative amount) and enter
“263A” in the space to the left of the total.
For details, see page F-4, Capitalizing
costs of property, and Uniform Capitalization Rules in chapter 6 of Pub. 225.

Line 35
If line 34f is a negative amount, subtract it
from the total of lines 12 through 34e. Enter
the result on line 35.

Line 36
If you have a loss, the amount of loss you
can deduct this year may be limited. If you
checked the “No” box on line E, also see
the Instructions for Form 8582.
Individuals. Enter your net profit or de-

ductible loss here and on Form 1040, line
18, and Schedule SE, line 1a. Complete line
37 before entering the loss on line 36.

Nonresident aliens. Enter the net profit or

deductible loss here and on Form 1040NR,
line 19. You should also enter this amount
on Schedule SE, line 1a if you are covered
under the U.S. social security system due to
an international social security agreement
currently in effect. See the Schedule SE
instructions for information on international social security agreements.
Partnerships. Enter the net profit or de-

ductible loss here and on Form 1065, line 5
(or Form 1065-B, line 7). Because the excess farm loss rules are applied at the partner level, the partnership will notify each
partner on the Schedule K-1 if the partnership received one of the subsidies discussed
later. Each partner should complete one of
the excess farm loss worksheets to determine if there is an excess farm loss.
Trusts and estates. Enter the net profit or

deductible loss here and on Form 1041, line
6. If you have a loss, complete line 37 to

Excess farm loss rules. If you received cer-

tain subsidies in 2010, your farm loss may
be reduced or eliminated. Check box 37b if
you received one of the subsidies below.
• Any direct or counter-cyclical payments under title I of the Food, Conservation, and Energy Act of 2008 (or any
payment you elected instead of this payment).
• Any Commodity Credit Corporation
loan.
Your excess farm loss for a year is the
amount by which your total deductions
from your farming businesses exceed your
total gross income or gain from your farming businesses, plus a threshold amount.
The threshold amount is the greater of
$300,000 ($150,000 if your filing status is
married filing separately) or your total net
profit or loss from farming businesses for
the last five years (2005-2009), including
for each of those years any net gain from
the sale of property used in your farming
businesses. To determine if you have an
excess farm loss, use one of the worksheets
beginning on page F-9.
Farming businesses defined. For purposes of calculating your excess farm loss
for the year, farming business has the
meaning used in section 263A(e)(4) (generally the trade or business of farming, including operating a nursery or sod farm or
raising or harvesting of trees bearing fruit,
nuts, or other crops, or ornamental trees).
Farming business also includes the trade
or business of processing a farm commodity even if it is not incidental to your farm.
Additionally, farming business includes
participating in a cooperative that
processes a farm commodity. As a result,
any activity reported on Schedule C that
involves processing a farm commodity
must be included when determining your
excess farm loss, and any losses from that
Schedule C activity may be limited by the
excess farm loss rules. Farming business
also includes any interest in a partnership
or S corporation involved in a farming
business.

F-7

The worksheets beginning on page F-9
may be used to determine if you have an
excess farm loss. These worksheets are
provided for your recordkeeping purposes
only, and which worksheet you should use
will depend on the nature and extent of
your farming businesses.
Any excess farm loss not allowed in
2010 may be carried forward and deducted
on Schedule F in the first year in which you
do not have an excess farm loss. In determining your excess farm loss for a year in
which you received a subsidy described
above, do not take into account any deduction for losses from fire, storm, or other
casualty, or from disease or drought involving any farming business. Also, you must
determine your excess farm loss before calculating any limits due to passive activity
on Form 8582.
At-risk rules. In most cases, if you have a
loss from a farming activity and amounts
invested in the activity for which you are
not at risk, you must complete Form 6198
to figure your allowable loss. The at-risk
rules generally limit the amount of loss (including loss on the disposition of assets)
you can claim to the amount you could
actually lose in the activity.
Check box 37b if you have amounts invested in this activity for which you are not
at risk, such as the following.
• Nonrecourse loans used to finance the
activity, to acquire property used in the activity, or to acquire the activity that are not
secured by your own property (other than
property used in the activity). However,
there is an exception for certain nonrecourse financing borrowed by you in connection with holding real property.
• Cash, property, or borrowed amounts
used in the activity (or contributed to the
activity, or used to acquire the activity) that
are protected against loss by a guarantee,
stop-loss agreement, or other similar arrangement (excluding casualty insurance
and insurance against tort liability).
• Amounts borrowed for use in the activity from a person who has an interest in
the activity, other than as a creditor, or who
is related under section 465(b)(3)(C) to a
person (other than you) having such an interest.
Figuring your deductible loss. Before determining your deductible loss, you must
check box 37a or 37b to determine if your
loss on line 36 is further limited by the
excess farm loss rules or the at-risk rules.
Follow the instructions below that apply to
your box 37 activity.
Box 37a because all your investment is
at risk and you did not receive a subsidy.
If all your investment amounts are at risk in
this activity and you did not receive a subsidy, check box 37a. If you checked the
“Yes” box on line E, enter your loss on line
36 and on Form 1040, line 18, and Schedule SE, line 1a. Nonresident aliens – enter
the deductible loss on Form 1040NR, line
19 (and Schedule SE, line 1a if applicable
– see Nonresident aliens under the line 36
instructions, earlier). Estates and trusts –
enter the deductible loss on Form 1041, line
6.
But if you checked the “No” box on line
E, you may need to complete Form 8582 to

figure your allowable loss to enter on line
36. See the Instructions for Form 8582.
Box 37b because all your investment is
at risk and you received a subsidy. Use
one of the worksheets beginning on page
F-9 to determine if you have an excess farm
loss that reduces the amount of loss you can
deduct this year. If you have more than one
farming business with an overall loss this
year, allocate the excess farm loss amount
on a pro rata basis among those farming
businesses.
If you checked the “Yes” box on line E,
enter that amount on Form 1040, line 18,
and Schedule SE, line 1a. Nonresident
aliens – enter the deductible loss on Form
1040NR, line 19 (and Schedule SE, line 1a
if applicable – see Nonresident aliens
under the line 36 instructions, earlier). Estates and trusts – enter the deductible loss
on Form 1041, line 6. Partnerships – enter
this amount on Form 1065, line 5 (or Form
1065-B, line 7).
But if you checked the “No” box on line
E, see the Instructions for Form 8582 to
determine your further loss limitation. If
your at-risk amount is zero or less, enter -0on line 36. Be sure to attach Form 6198 to
your return.
Box 37b because some investment is not
at risk and you received a subsidy. Use
one of the worksheets beginning on the
next page to determine if you have an excess farm loss that reduces the amount of
loss you can deduct this year. If you have
more than one farming business with an
overall loss this year, allocate the excess
farm loss amount on a pro rata basis among
those farming businesses.
If you checked the “Yes” box on line E,
first complete Form 6198 to determine the
amount of your deductible loss and enter
that amount on Form 1040, line 18, and
Schedule SE, line 1a. Nonresident aliens –
enter the deductible loss on Form 1040NR,
line 19 (and Schedule SE, line 1a if applicable – see Nonresident aliens under the line
36 instructions, earlier). Estates and trusts
– enter the deductible loss on Form 1041,
line 6. Partnerships – do not complete
Form 6198; enter your profit or loss on line
36 and on Form 1065, line 5 (or Form
1065-B, line 7).
But if you checked the “No” box on line
E, see the Instructions for Form 8582 to
determine your further loss limitation. If
your at-risk amount is zero or less, enter -0on line 36. Be sure to attach Form 6198 to
your return.
Box 37b because some investment is at
risk and you did not receive a subsidy. If
you checked box 37b because some invest-

ment amount in this activity is not at risk
and you did not receive a subsidy, first
complete Form 6198 to determine the
amount of your deductible loss. If you
checked the “Yes” box on line E, enter that
amount on line 36 and on Form 1040, line
18, and Schedule SE, line 1a. Nonresident
aliens – enter the deductible loss on Form
1040NR, line 19 (and Schedule SE, line 1a
if applicable – see Nonresident aliens
under the line 36 instructions, earlier). Estates and trusts – enter the deductible loss
on Form 1041, line 6. Partnerships – do not
complete Form 6198; enter your profit or
loss on line 36 and on Form 1065, line 5 (or
Form 1065-B, line 7).
But if you checked the “No” box on line
E, see the Instructions for Form 8582 to
determine your further loss limitation. If
your at-risk amount is zero or less, enter -0on line 36. Be sure to attach Form 6198 to
your return.

If you checked box 37b because
some investment is not at risk
and you do not attach Form
6198, the processing of your return may be delayed.
Any loss from this activity not allowed
for 2010 only because of the at-risk rules is
treated as a deduction allocable to the activity in 2011.
For details, see Pub. 925 and the
Instructions for Form 6198.
Excess farm loss worksheets. You may
complete one of these worksheets to determine if you have an excess farm loss in
2010. Do not attach these worksheets to
your return; keep them for your records.
You will need them next year when any
excess farm loss may be deducted, as discussed above. Which worksheet you should
use depends on your farming business, or
businesses, as explained in Farming businesses defined, earlier.
• Use Worksheet 1 if your farming business or businesses include only profit or
loss reported on Schedule F (including
multiple copies of Schedule F).
• Use Worksheet 2 if your farming businesses include Schedule F and any Schedule C activity of processing a farm
commodity.
• Use Worksheet 3 if your farming businesses include Schedule F and a Schedule
E interest in a partnership or S corporation
involved in a farming business.
• Use Worksheet 4 if your farming businesses include Schedule F, Schedule C activity of processing a farm commodity, a

F-8

Schedule E interest in a partnership or S
corporation involved in a farming business,
and farm rental income or loss reported on
Form 4835.
• Use Worksheet 5 if your farming business is limited to only farm rental income
or loss reported on Form 4835.
If you file multiple copies of Schedule
F, Schedule C, or Schedule E as part of
your farming businesses, you must combine the income, deductions, and net gain/
loss for purposes of determining whether
you have an excess farm loss on the worksheets. If you sold any property used in
your farming businesses, you must include
any gain or loss on the sale of that property
(reported on Form 4797, Sales of Business
property, or Schedule D (Form 1040), Capital Gains and Losses). Be sure to include
the gain or loss attributable to property
used in your farming business or businesses, as defined earlier in Farming businesses defined. Do not include gain or loss
attributable to property used in nonfarming
businesses or nonbusiness property.

Part III. Farm
Income—Accrual
Method
If you use an accrual method, report farm
income when you earn it, not when you
receive it. In most cases, you must include
animals and crops in your inventory if you
use this method. See Pub. 225 for exceptions, inventory methods, how to change
methods of accounting, and rules that require certain costs to be capitalized or included in inventory.
If you were a
debtor in a chapter 11 bankruptcy case during 2010, see the instructions for Form
1040 and page SE-2 of the instructions for
Schedule SE (Form 1040).
Chapter 11 bankruptcy.

Lines 39a Through 41c
See the instructions for lines 5a through 7c
on page F-3.

Line 44
See the instructions for line 10 that begin
on page F-3.

Excess Farm Loss Worksheet 1—Schedule F farming business only Keep for Your Records
CAUTION: In determining if you have an excess farm loss, do not take into account any deductions for losses arising by reason of fire, storm, or other
casualty, or by reason of disease or drought, involving your farming business.
1. Enter the amount from your 2010 Schedule(s) F, line 35. Is this amount less
than 300,000 (150,000 if married filing separately)? If yes, stop here. You
do not have an excess farm loss in 2010. If no, continue to line 2 . . . . . . .

1.

2. Subtract 300,000 (150,000 if married filing separately) from line 1 . . . . . .

2.

3. Enter the amount from your 2010 Schedule(s) F, line 11 . . . . . . . . . . . . .

3.

4. Is line 3 greater than or equal to line 2? If yes, stop here. You do not have an excess farm loss in 2010. If no,
continue to line 5.
5. Enter your net gain/loss from the sale of farming business property reported
on Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
6. Enter your net gain/loss from the sale of farming business property reported
on Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Combine line 5 and line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Add line 3 and line 7. Is this greater than or equal to line 2? If yes, stop here. You do not have an excess farm
loss in 2010. If no, continue to line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Enter the amount from your 2009 Schedule(s) F, line 36 . . . . . . . . . . . . .

9.

10. Enter your combined net gain/loss from the sale of farming business
property reported on your 2009 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Enter the amount from your 2008 Schedule(s) F, line 36 . . . . . . . . . . . . .

11.

12. Enter your combined net gain/loss from the sale of farming business
property reported on your 2008 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Enter the amount from your 2007 Schedule(s) F, line 36 . . . . . . . . . . . . .

13.

14. Enter your combined net gain/loss from the sale of farming business
property reported on your 2007 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Enter the amount from your 2006 Schedule(s) F, line 36 . . . . . . . . . . . . .

15.

16. Enter your combined net gain/loss from the sale of farming business
property reported on your 2006 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.

17. Enter the amount from your 2005 Schedule(s) F, line 36 . . . . . . . . . . . . .

17.

18. Enter your combined net gain/loss from the sale of farming business
property reported on your 2005 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.

19. Combine lines 9 through 18. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.

20. Enter the greater of line 19 or 300,000 (150,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . .

20.

21. Add line 8 and line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.

22. Excess farm loss. Subtract line 1 from line 21. If zero or less, you have an excess farm loss that reduces the
amount of loss you can deduct this year. If you have more than one farming business with an overall loss this
year, allocate the excess farm loss amount on a pro rata basis among those farming businesses . . . . . . . . . . . . .

22.

F-9

Excess Farm Loss Worksheet 2—Schedule F farming business(es)
and Schedule C activity of processing a farm commodity

Keep for Your Records

CAUTION: In determining if you have an excess farm loss, do not take into account any deductions for losses arising by reason of fire, storm, or other
casualty, or by reason of disease or drought, involving your farming businesses.
1. Enter the amount from your 2010 Schedule(s) F, line 35 . . . . . . . . . . . . .

1.

2. Enter the total amount from your 2010 Schedule(s) C, line 28 and line 30

2.

3. Add lines 1 and 2. Is this amount less than 300,000 (150,000 if married filing separately)? If yes, stop here. You
do not have an excess farm loss in 2010. If no, continue to line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Subtract 300,000 (150,000 if married filing separately) from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Enter the amount from your 2010 Schedule(s) F, line 11 . . . . . . . . . . . . .

5.

6. Enter the amount from your 2010 Schedule(s) C, line 7 . . . . . . . . . . . . .

6.

7. Combine line 5 and line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Is line 7 greater than or equal to line 4? If yes, stop here. You do not have an excess farm in 2010. If no,
continue to line 9.
9. Enter your net gain/loss from the sale of farming business property reported
on Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
10. Enter your net gain/loss from the sale of farming business property reported
on Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Combine line 9 and line 10. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Add line 7 and line 11. Is this greater than or equal to line 4? If yes, stop here. You do not have an excess farm
loss in 2010. If no, continue to line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Enter the amount from your 2009 Schedule(s) F, line 36 . . . . . . . . . . . . .

13.

14. Enter the amount from your 2009 Schedule(s) C, line 31 . . . . . . . . . . . . .

14.

15. Enter your combined net gain/loss from the sale of farming business
property reported on your 2009 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

16. Enter the amount from your 2008 Schedule(s) F, line 36 . . . . . . . . . . . . .

16.

17. Enter the amount from your 2008 Schedule(s) C, line 31 . . . . . . . . . . . . .

17.

18. Enter your combined net gain/loss from the sale of farming business
property reported on your 2008 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.

19. Enter the amount from your 2007 Schedule(s) F, line 36 . . . . . . . . . . . . .

19.

20. Enter the amount from your 2007 Schedule(s) C, line 31 . . . . . . . . . . . . .

20.

21. Enter your combined net gain/loss from the sale of farming business
property reported on your 2007 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.

22. Enter the amount from your 2006 Schedule(s) F, line 36 . . . . . . . . . . . . .

22.

23. Enter the amount from your 2006 Schedule(s) C, line 31 . . . . . . . . . . . . .

23.

24. Enter your combined net gain/loss from the sale of farming business
property reported on your 2006 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.

25. Enter the amount from your 2005 Schedule(s) F, line 36 . . . . . . . . . . . . .

25.

26. Enter the amount from your 2005 Schedule(s) C, line 31 . . . . . . . . . . . . .

26.

27. Enter your combined net gain/loss from the sale of farming business
property reported on your 2005 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.

28. Combine lines 13 through 27. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.

29. Enter the greater of line 28 or 300,000 (150,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . .

29.

30. Add line 12 and line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.

31. Excess farm loss. Subtract line 3 from line 30. If zero or less, you have an excess farm loss that reduces the
amount of loss you can deduct this year. If you have more than one farming business with an overall loss this
year, allocate the excess farm loss amount on a pro rata basis among those farming businesses . . . . . . . . . . . .

31.

F-10

Excess Farm Loss Worksheet 3—Schedule F farming business(es)
and Schedule E partnership or S corporation income or loss from
farming business(es)

Keep for Your Records

CAUTION: In determining if you have an excess farm loss, do not take into account any deductions for losses arising by reason of fire, storm, or other
casualty, or by reason of disease or drought, involving your farming businesses.
1. Enter the amount from your 2010 Schedule(s) F, line 35 . . . . . . . . . . . . . .

1.

2. Enter the amount from your 2010 Schedule(s) E, line 31 . . . . . . . . . . . . . .

2.

3. Add lines 1 and 2. Is this amount less than 300,000 (150,000 if married filing separately)? If yes, stop here.
You do not have an excess farm loss in 2010. If no, continue to line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Subtract 300,000 (150,000 if married filing separately) from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Enter the amount from your 2010 Schedule(s) F, line 11 . . . . . . . . . . . . . .

5.

6. Enter the amount from your 2010 Schedule(s) E, line 30 . . . . . . . . . . . . . .

6.

7. Combine line 5 and line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Is line 7 greater than or equal to line 4? If yes, stop here. You do not have an excess farm in 2010. If no,
continue to line 9.
9. Enter your net gain/loss from the sale of farming business property reported
on Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
10. Enter your net gain/loss from the sale of farming business property reported
on Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Combine line 9 and line 10. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Add line 7 and line 11. Is this greater than or equal to line 4? If yes, stop here. You do not have an excess farm
loss in 2010. If no, continue to line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Enter the amount from your 2009 Schedule(s) F, line 36 . . . . . . . . . . . . . .

13.

14. Enter the amount from your 2009 Schedule(s) E, line 32 . . . . . . . . . . . . . .

14.

15. Enter your combined net gain/loss from the sale of farming business property
reported on your 2009 Form 4797 and Schedule D. If zero or less, enter -0-

15.

16. Enter the amount from your 2008 Schedule(s) F, line 36 . . . . . . . . . . . . . .

16.

17. Enter the amount from your 2008 Schedule(s) E, line 32 . . . . . . . . . . . . . .

17.

18. Enter your combined net gain/loss from the sale of farming business property
reported on your 2008 Form 4797 and Schedule D. If zero or less, enter -0-

18.

19. Enter the amount from your 2007 Schedule(s) F, line 36 . . . . . . . . . . . . . .

19.

20. Enter the amount from your 2007 Schedule(s) E, line 32 . . . . . . . . . . . . . .

20.

21. Enter your combined net gain/loss from the sale of farming business property
reported on your 2007 Form 4797 and Schedule D. If zero or less, enter -0-

21.

22. Enter the amount from your 2006 Schedule(s) F, line 36 . . . . . . . . . . . . . .

22.

23. Enter the amount from your 2006 Schedule(s) E, line 32 . . . . . . . . . . . . . .

23.

24. Enter your combined net gain/loss from the sale of farming business property
reported on your 2006 Form 4797 and Schedule D. If zero or less, enter -0-

24.

25. Enter the amount from your 2005 Schedule(s) F, line 36 . . . . . . . . . . . . . .

25.

26. Enter the amount from your 2005 Schedule(s) E, line 32 . . . . . . . . . . . . . .

26.

27. Enter your combined net gain/loss from the sale of farming business property
reported on your 2005 Form 4797 and Schedule D. If zero or less, enter -0-

27.

28. Combine lines 13 through 27. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.

29. Enter the greater of line 28 or 300,000 (150,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . .

29.

30. Add line 12 and line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.

31. Excess farm loss. Subtract line 3 from line 30. If zero or less, you have an excess farm loss that reduces the
amount of loss you can deduct this year. If you have more than one farming business with an overall loss this
year, allocate the excess farm loss amount on a pro rata basis among those farming businesses . . . . . . . . . . . .

31.

F-11

Excess Farm Loss Worksheet 4—Schedule F farming business(es),
Schedule C activity of processing a farm commodity, Schedule E
partnership or S corporation income or loss from farming
business(es), and Form 4835 rental income or loss

Keep for Your Records

CAUTION: In determining if you have an excess farm loss, do not take into account any deductions for losses arising by reason of fire, storm, or other
casualty, or by reason of disease or drought, involving your farming businesses.
1. Enter the amount from your 2010 Schedule(s) F, line 35 . . . . . . . . . . . . .

1.

2. Enter the total amount from your 2010 Schedule(s) C, line 28 and line 30,
for activity of processing a farm commodity . . . . . . . . . . . . . . . . . . . . .

2.

3. Enter the amount from your 2010 Schedule(s) E, line 31, for interest in a
partnership or S corporation involved in farming businesses . . . . . . . . . .

3.

4. Enter the amount from your 2010 Form 4835, line 31 . . . . . . . . . . . . . .

4.

5. Add lines 1, 2, 3, and 4. Is this amount less than 300,000 (150,000 if married filing separately)? If yes, stop here.
You do not have an excess farm loss in 2010. If no, continue to line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Subtract 300,000 (150,000 if married filing separately) from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Enter the amount from your 2010 Schedule(s) F, line 11 . . . . . . . . . . . . .

7.

8. Enter the amount from your 2010 Schedule(s) C, line 7 . . . . . . . . . . . . .

8.

9. Enter the amount from your 2010 Schedule(s) E, line 30 . . . . . . . . . . . .

9.

10. Enter the amount from your 2010 Form 4835, line 7 . . . . . . . . . . . . . . .

10.

11. Combine lines 7, 8, 9, and 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Is line 11 greater than or equal to line 6? If yes, stop here. You do not have an excess farm loss in 2010. If no,
continue to line 13.
13. Enter your net gain/loss from the sale of farming business property reported
on Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.
14. Enter your net gain/loss from the sale of farming business property reported
on Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Combine line 13 and line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

16. Add lines 11 and 15. Is this greater than or equal to line 6? If yes, stop here. You do not have an excess farm
loss in 2010. If no, continue to line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.

TIP: Lines 17 through 43 help you calculate the threshold amount discussed in the instructions. The threshold
amount is the greater of $300,000 ($150,000 if married filing separately) or your total net profit or loss from
farming businesses for the last five years (2005-2009), including for each of those years any net gain from the
sale of property used in your farming businesses.
17. Enter the amount from your 2009 Schedule(s) F, line 36 . . . . . . . . . . . . .
17.
18. Enter the amount from your 2009 Schedule(s) C, line 31 . . . . . . . . . . . .

18.

19. Enter the amount from your 2009 Schedule(s) E, line 32 . . . . . . . . . . . .

19.

20. Enter the amount from your 2009 Form 4835, line 32 . . . . . . . . . . . . . .

20.

21. Enter your combined net gain/loss from the sale of farming business
property reported on your 2009 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.

22. Enter the amount from your 2008 Schedule(s) F, line 36 . . . . . . . . . . . . .

22.

23. Enter the amount from your 2008 Schedule(s) C, line 31 . . . . . . . . . . . .

23.

24. Enter the amount from your 2008 Schedule(s) E, line 32 . . . . . . . . . . . .

24.

25. Enter the amount from your 2008 Form 4835, line 32 . . . . . . . . . . . . . .

25.

26. Enter your combined net gain/loss from the sale of farming business
property reported on your 2008 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.

27. Enter the amount from your 2007 Schedule(s) F, line 36 . . . . . . . . . . . . .

27.

28. Enter the amount from your 2007 Schedule(s) C, line 31 . . . . . . . . . . . .

28.

(Continued on next page)

F-12

Excess Farm Loss Worksheet 4 (Continued)
29.

Enter the amount from your 2007 Schedule(s) E, line 32 . . . . . . . . . . . . .

29.

30.

Enter the amount from your 2007 Form 4835, line 32 . . . . . . . . . . . . . . .

30.

31.

Enter your combined net gain/loss from the sale of farming business
property reported on your 2007 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.

32.

Enter the amount from your 2006 Schedule(s) F, line 36 . . . . . . . . . . . . .

32.

33.

Enter the amount from your 2006 Schedule(s) C, line 31 . . . . . . . . . . . . .

33.

34.

Enter the amount from your 2006 Schedule(s) E, line 32 . . . . . . . . . . . . .

34.

35.

Enter the amount from your 2006 Form 4835, line 32 . . . . . . . . . . . . . . .

35.

36.

Enter your combined net gain/loss from the sale of farming business
property reported on your 2006 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36.

37.

Enter the amount from your 2005 Schedule(s) F, line 36 . . . . . . . . . . . . .

37.

38.

Enter the amount from your 2005 Schedule(s) C, line 31 . . . . . . . . . . . . .

38.

39.

Enter the amount from your 2005 Schedule(s) E, line 32 . . . . . . . . . . . . .

39.

40.

Enter the amount from your 2005 Form 4835, line 32 . . . . . . . . . . . . . . .

40.

41.

Enter your combined net gain/loss from the sale of farming business
property reported on your 2005 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41.

42.

Combine lines 17 through 41. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42.

43.

Enter the greater of line 42 or 300,000 (150,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . .

43.

44.

Add lines 16 and 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44.

45.

Excess farm loss. Subtract line 5 from line 44. If zero or less, you have an excess farm loss that reduces the
amount of loss you can deduct this year. If you have more than one farming business with an overall loss this
year, allocate the excess farm loss amount on a pro rata basis among those farming businesses . . . . . . . . . . . .

45.

F-13

Excess Farm Loss Worksheet 5—Form 4835 for farm rental income
or loss from farming business

Keep for Your Records

CAUTION: In determining if you have an excess farm loss, do not take into account any deductions for losses arising by reason of fire, storm, or other
casualty, or by reason of disease or drought, involving your farming business.
1. Enter the amount from your 2010 Form 4835, line 31. Is this amount less
than 300,000 (150,000 if married filing separately)? If yes, stop here. You
do not have an excess farm loss in 2010. If no, continue to line 2 . . . . . . .

1.

2. Subtract 300,000 (150,000 if married filing separately) from line 1 . . . . . .

2.

3. Enter the amount from your 2010 Form 4835, line 7 . . . . . . . . . . . . . . .

3.

4. Is line 3 greater than or equal to line 2? If yes, stop here. You do not have an excess farm in 2010. If no,
continue to line 5.
5. Enter your net gain/loss from the sale of farming business property reported
on Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
6. Enter your net gain/loss from the sale of farming business property reported
on Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Combine line 5 and line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Add line 3 and line 7. Is this greater than or equal to line 2? If yes, stop here. You do not have an excess farm
loss in 2010. If no, continue to line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Enter the amount from your 2009 Form 4835, line 32 . . . . . . . . . . . . . .

9.

10. Enter your combined net gain/loss from the sale of farming business
property reported on your 2009 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Enter the amount from your 2008 Form 4835, line 32 . . . . . . . . . . . . . .

11.

12. Enter your combined net gain/loss from the sale of farming business
property reported on your 2008 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Enter the amount from your 2007 Form 4835, line 32 . . . . . . . . . . . . . .

13.

14. Enter your combined net gain/loss from the sale of farming business
property reported on your 2007 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Enter the amount from your 2006 Form 4835, line 32 . . . . . . . . . . . . . .

15.

16. Enter your combined net gain/loss from the sale of farming business
property reported on your 2006 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.

17. Enter the amount from your 2005 Form 4835, line 32 . . . . . . . . . . . . . .

17.

18. Enter your combined net gain/loss from the sale of farming business
property reported on your 2005 Form 4797 and Schedule D. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.

19. Combine lines 9 through 18. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.

20. Enter the greater of line 19 or 300,000 (150,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . .

20.

21. Add lines 8 and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.

22. Excess farm loss. Subtract line 1 from line 21. If zero or less, you have an excess farm loss that reduces the
amount of loss you can deduct this year. If you have more than one farming business with an overall loss this
year, allocate the excess farm loss amount on a pro rata basis among those farming businesses . . . . . . . . . . . .

22.

F-14
Printed on recycled paper