Farmland is cash rented per acre, tenant who farms also rents house as residence located on Farm. Per Sch E instructions, does the Farmland cash rent need to be separated out from the Farm house rent which is the resident of the tenant? Shouldn't this be treated as if the Farmland was rented by one tenant and the farm house was rented by another tenant? First thing that comes to mine is, Farmland does not depreciate while a structure like a house does.
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Do you have 2 separate rental contracts. One for the land and one for the house? I would think TP should have. Then I have 2 rentals. Just thinking but maybe someone else will weigh in. -
Well sort of on the rental agreements
I am now beginning to think the Landlord was combining the rent from the farmhouse and the farmland due to the landlord renting the farmhouse to the son at around 20% of FMV thus maybe trying to skirt the IRS rule on renting to relatives below FMV.Comment
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I don't that will pass muster because tp is renting two different types of property. I could be wrong. However I have seen where service has allowed loss to relative based on economic conditions and not wanting property to become destroyed.Comment
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