raffle

[Unregistered]

Farmers wants to hold a raffle. Winner gets to hunt on farmers land. How would
this be handled --sch f filer. All income and expenses run thru sch. F?
Any suggestions. There would be a contract to be signed before hunt.

[Black Bart]

Miscellaneous Income

Sounds like a Form 1040 line 21 item to me. It's not part of his regular farming "business," so I don't see any point in paying SS on it.

[Kram BergGold]

I say Schedule F

I don't think there is a right answer here. Maybe the farmer wants increased Sch F income. Maybe there are significant expenses that aren't allowed if income goes on line 21. If the farmer sees this as another way to make money off of his land I say Schedule F.

[Jiggers]

Raffle = Gambling?

Just be sure that the farmer verifies that he is not violating any gambling regulations for his state in holding a raffle.

Most states limit raffles to non-profit organizations.

[cpadan]

depends on facts

Off the top of my head, looking beyond the raffe issue, if the farmer quides the hunter or performs other services it is S..E. income. On the other hand, if the hunter merely has the right to use the property then it might be classified as a rental acitvity.

As for as the rafffe, that sounds like an activiy that was conducted for profit and subject to SE tax.

[Snaggletooth]

Farm Rent

Sounds like Form 4835 stuff to me guys.

I am using this 4835 increasingly, although the original intent was to report shares of a crop sold on shares. This had the effect of separating the landowner from the sharecropper, and it follows that the landowner would have NON-EARNED income.

This may sound ridiculous, but when I first got in this lousy business, non-earned income was the worst you could have, with a marginal tax rate of up to 70%.

Over the years I have used Form 4835 for all manner of farm rents. For example, I have landowners who are in the nursing home and cannot possibly work their farm, but they rent it out. Others who are on disability and cannot work their farm, but they rent it out.

Ironically enough, the STATED purpose of Form 4835 is STILL the old sharecropper arrangement. But I have used it for Farm rents for a number of years when there is obviously no self-employment income. Hope I don't go to jail...

[Unregistrd]

Raffle tickets

Some states require you "if requested" give out tickets, so in part if someone who has researched the law desides he wants a freebie and is not given one, a good lawsuit possible!

2nd you may have to 1099 the winner!

[barzillai]

Form 4835

Instructions for form 4835 say it is only to be used "to report farm rental income based on crops or livestock produced by the tenant if you were the landowner (or sub-lessor) and did not materially participate in the operation or management of the farm." It continues, "
Landowners (or sub-lessors) must not use this form to report cash rent received for
pasture or farmland if the amount is based on a flat charge. Report this income directly on
Schedule E (Form 1040)." However, is this really rental income or proceeds from gambling? What do you do in that case?