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    Farmhouse (rental) on Farmland.

    The Farmhouse rental would fall under a 27.5 SL depr. The Farmland that is cash rented has no depr except depreciating assets on Farmland like fences, structures, buildings etc that are not used for residential purposes. Seems to me that these two should be separated out on Sch E basically have their own column. In fact, shouldn't items like fences, barn etc. that are on the Farmland have their own column on Sch E?

    #2
    Is this correct?

    Originally posted by AZ-Tax View Post
    The Farmhouse rental would fall under a 27.5 SL depr. The Farmland that is cash rented has no depr except depreciating assets on Farmland like fences, structures, buildings etc that are not used for residential purposes. Seems to me that these two should be separated out on Sch E basically have their own column. In fact, shouldn't items like fences, barn etc. that are on the Farmland have their own column on Sch E?
    EDITED POST AFTER RE-READING YOUR POST

    If cash rented to others and you are not using the farm land for crops, etc. I think schedule E but depending on your answer may be form 4835 or schedule F

    But do not want to guess which, see attached to see if it helps



    Are you saying if two separate rentals and owner not using the farm land for farming but rather cash rental the:

    SCHEDULE E column A
    COLUMN A. FARMHOUSE - residential rental?
    Rental income $
    Rental expenses $
    Depr 27.5 SL dear expense $
    Net income $


    SCHEDULE E column B
    COLUMN B. FARMLAND - non residential
    Rental income $
    Rental expenses $
    Depreciable assets expenses $
    Net income $

    What result did you get by having both on one Schedule E column A & B?

    If cash rental for farmland, think one schedule E as second rental property column B for farmland. But reference chart in attachment for specifics.
    Last edited by TAXNJ; 05-13-2015, 11:51 PM.
    Always cite your source for support to defend your opinion

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      #3
      I took over a client 5 years back from a retiring CPA that owns close to 100 acres of agriculture and mixed use property. The way we have been doing the tax returns is as follows:

      1) Rental of a workshop and parts store. Commercial. 39 yrs depreciation

      2) Rental of 2 houses residential rental 27.5 yrs depreciation

      3)Rental of a portion of the land to another farmer and the balance that they farm Sch F.

      The accounting is all separate and the access road upkeep is prorated between the different uses.
      Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

      Comment


        #4
        Handle

        Originally posted by ATSMAN View Post
        I took over a client 5 years back from a retiring CPA that owns close to 100 acres of agriculture and mixed use property. The way we have been doing the tax returns is as follows:

        1) Rental of a workshop and parts store. Commercial. 39 yrs depreciation

        2) Rental of 2 houses residential rental 27.5 yrs depreciation

        3)Rental of a portion of the land to another farmer and the balance that they farm Sch F.

        The accounting is all separate and the access road upkeep is prorated between the different uses.
        For # 1 & 2 above what form used?
        Always cite your source for support to defend your opinion

        Comment


          #5
          Originally posted by TAXNJ View Post
          For # 1 & 2 above what form used?
          For the workshop and parts store rental I changed that to Sch C from Sch F that was being filed previously.

          For the 2 house rentals it goes on sch E. That is how it was from the get go.
          Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

          Comment


            #6
            SCH C and not Sch E

            Originally posted by ATSMAN View Post
            For the workshop and parts store rental I changed that to Sch C from Sch F that was being filed previously.

            For the 2 house rentals it goes on sch E. That is how it was from the get go.
            What is the rationale "For the workshop and parts store rental I changed that to Sch C from Sch F" and not a Schedule E for this rental?

            Thanks
            Always cite your source for support to defend your opinion

            Comment


              #7
              Originally posted by TAXNJ View Post
              What is the rationale "For the workshop and parts store rental I changed that to Sch C from Sch F" and not a Schedule E for this rental?

              Thanks
              During non farming season, my client also moonlights as a mechanic at the workshop. But he is not as an employee or partner (his cousin owns the workshop and part store business). He fixes snow removal equipment, snow machines etc. People pay him directly for his services. He uses his own tools. No portion of his earnings go to his cousin.

              He is considerably older than his cousin and the eventual goal is to sell the workshop and part store building to his cousin.
              Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

              Comment


                #8
                Own

                Originally posted by ATSMAN View Post
                During non farming season, my client also moonlights as a mechanic at the workshop. But he is not as an employee or partner (his cousin owns the workshop and part store business). He fixes snow removal equipment, snow machines etc. People pay him directly for his services. He uses his own tools. No portion of his earnings go to his cousin.

                He is considerably older than his cousin and the eventual goal is to sell the workshop and part store building to his cousin.
                If client owns and rents the property how is the rental income reported for the workshop that is rented?
                Always cite your source for support to defend your opinion

                Comment


                  #9
                  Az

                  AZ. Any of the posts help?
                  Always cite your source for support to defend your opinion

                  Comment


                    #10
                    Originally posted by TAXNJ View Post
                    If client owns and rents the property how is the rental income reported for the workshop that is rented?
                    Gross rent on line 6, Sch C. Depreciation line 13. Repairs line 21. Portion of the RE tax related to the building line 23 and a few misc items on line 27. Building has a separate electric, gas and water meter and tenant pays 100% of utilities.

                    No IRS notice or audit so far so I am comfortable keeping it this way for now.
                    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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