CRP payments vs SE Tax

[ed spencer]

Help.........What's the latest on CRP paymenst and Self Employment tax? I have two situations:
1) Four sibling farm partnership. Absolutely no participation. Don't even know how many acres are involved. May drive by once a year. CRP payments for some of the acres. Rent
for the other acres. I'm inclined to put the CRP income on Sch F But the rent on E, maybe 4835. Comments? Can I call the CRP rent? Which Form?

2) TP & spouse own farmland. Spouse has W-2 job, Zero farm participatiion. TP
receives CRP on some of the acres. And actually gets paid (1099-MISC) by the renter to help out (under $10,000). Of course the 1099 Misc is SE income. Now, again, can I put the rent on Eor 4835 or should it be F in this case? And the CRP? New client. No evidence of CRP last year. All farm rental on E last Yr. Have not figured out Material Participation yet
500 hours, 100 hours, yada, yada, yada..........

Have fun with me, and I do appreciate your comments....Ed

[Burke]

You speaketh in letters. What is CRP?

[ed spencer]

You speaketh in letters. What is CRP?

My apologies.......CRP is a farm program called Conservation Reserve Program
whereby farmers set aside marginal land and plant it to conserving crops to save
the soil and help wildlife. In return they get paid "rent" every year, but it is quite
a bit less than the "going" rate for good cropland. There's been debate as to whether
these payments are like "rent" and go on Sch E and not subject to Self Employment
Tax or whether it is more like sale of grain and included on Sch F. And I need
help with this concept.........Thank you, Ed