Form 4835 is used to report farm income if the taxpayer is the landowner or sub-lessor, was paid based on production from the farm, and did not materially participate in the operation or management of the farm.
If there is a question about whether or not the taxpayer as a landlord materially participated, see IRS Publication 225, Farmer's Tax Guide for assistance.
Form 4835 isn't used to report farm-related income or loss when the taxpayer is one of the following:
- A tenant - Report on Schedule F.
- A landowner or sub-lessor who materially participated in the operation or management of the farm - Report on Schedule F.
- A landowner or sub-lessor who received cash rent for pasture or farmland based on a flat rate - Report on Schedule E.
- An estate or trust with rental income and expenses from crop and livestock shares - Report on Schedule E.
- A partnership or S corporation with rental income and expenses from crop and livestock shares - Report on Form 8825.
To complete Form 4835, from the Main Menu of the tax return (Form 1040) select:
- Rents, Royalties, Entities (Sch E,K-1,4835,8582)
- Part V (Including Form 4835)
- Net Farm Rental Income/Loss (Form 4835) - Select New.
- Enter all the information that applies.