Form 4835 - QBI Deduction

**TAXNJ** · 02-03-2019, 03:47 PM

Originally posted by Hoosier

I'm sure this has already been covered but... Client has a form 4835 for the rental of farm land to a local farmer. Does the income received for rent and reported on form 4835 qualify for the QBI Deduction? Client is not a real estate professional and is not in the business of farming or renting property. He just happens to have some land he rents out to the local farmer. Thanks.

See

Cash Rents VS Crop-Share and Sec 199A deduction and SE Tax - TMI Message Board

https://forum.thetaxbook.com/forum/discussion-forums/main-forum-tax-discussion/295888-cash-rents-vs-crop-share-and-sec-199a-deduction-and-se-tax

If farmer/landlord (who does not materially participate in the farm operation) has cash rent arrangement with tenant, it would appear that the activity does not rise to the level of a trade or business for purposes of Sec 199A deduction and the income would be reported on Sch E and not be subject to SE tax. Correct? If the arrangement is crop-share where

**TAXNJ** · 02-03-2019, 07:12 PM

You might consider following these sites:

https://www.calt.iastate.edu/blogpos...tions-released

and

Here’s how tax reform affects farmers and ranchers | Internal Revenue Service

https://www.irs.gov/newsroom/heres-how-tax-reform-affects-farmers-and-ranchers

Tax Reform Tax Tip 2018-169, October 31, 2018

**Twin Turbo Z** · 02-03-2019, 07:42 PM

Form 4835 is to report farm rental income based on crops or livestock produced by the tenant. If all your client does is cash rent the land, then it goes on Schedule E. And in our opinion, the 250 hours comes into play for QBI. IRS Farmers Guide Pub. 225 and Form 4835 instructions will help you out.

Form 4835 - QBI Deduction

Form 4835 - QBI Deduction

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