Patronage Dividends

[Earl]

Client is not a farmer is retired and just gardens on property he owns. Does not sell any part of what he raises.

Received patronage dividend from farmers coop. 1099 PATR Block 1. How to report when not in farming.

[taxdude71]

Other income not subject to SE

[Nashville]

No Reporting

I favor no income at all, unless there is a business operation to which the "dividends" apply.

These patronage "dividends" are really no more than a reduction in expense. As a matter of fact, they are apportioned out to co-operative customers in the proportion of which these customers spent their money.

Back in the days of mutual life insurance "dividends" before demutualization, the IRS long supported the notion that these "dividends" were not income, but rather then reduction of a non-deductible expense.

If we're talking non-deductible gardenias and pansies, the 1099-PATR should not be income. I would attach a statement referenced on line 21 so that any reporting requirement for the 1099-PATR is absolved.

[Gretel]

Agree with Nashville, TN.