I have a client that leases land to hunters. There seems to be a good demand in this area for this service. They also have some limited income from growing and selling crops. Should this be reported on Schedule C or F?
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You mentioned service. Is he providing any service? I haven't looked at this type of thing but since it is rent for real estate could it not go on sch e? -
Clarification
Sorry. Its actually a Partnership. Just wondering if it should go on Schedule F or not.Comment
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Originally posted by Unregistered
Maybe Schedule 4835. Not sure when its appropriate to use this vs Schedule F.Comment
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You need to determine first whether the income is subject to SE tax or not. Then you will know where to put income on tax return.Comment
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You said the business was renting land.
TTB, page 7-7, "Use Form 4835 if rental income is based on shares of crops or livestock produced by the tenant...."
"Landowners use Schedule E to report cash rent received for pasture or farmland if the amount is based on a flat charge..."
"If the farm landlord materially participates in the activities associated with the rental, the income is reported on Schedule F and is subject to SE tax."Comment
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I do not report hunting leases by farmers and ranchers as SE income when they simply lease out the hunting rights. If they are providing lodging, packing, guiding ect; that would be different.
DanComment
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That is what I was thinking too. So based on that assumption what Schedule would you use? Would they report the money received from rental on a different schedule than the crops?Originally posted by cpadanComment
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For Individuals I put it on Sch E, for partnerships you can put it on 8825 or just show the gross on 3a of shedule K. If the farm is rented out per crop share 4835 would be ok.
DanComment
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