Page 263 - Individual Forms & Instructions Guide

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• Schedule SE (Form 1040) to pay self-employment tax on Line F, later, and the 2022 General Instructions for Certain In-
income from your farming business. formation Returns.
• Form 461 to figure excess business loss. If you received cash of more than $10,000 in one or more
• Form 3800 to claim any general business credits. related transactions in your farming business, you may have to
• Form 4562 to claim depreciation (including the special file Form 8300. For details, see Pub. 1544.
allowance) on assets placed in service in 2022, to claim
amortization that began in 2022, to make an election under Reportable transaction disclosure statement. If you entered
section 179 to expense certain property, or to report into a reportable transaction in 2022, you must file Form 8886
information on vehicles and other listed property. to disclose information if your federal income tax liability is af-
• Form 4684 to report a casualty or theft gain or loss fected by your participation in the transaction. You may have
involving farm business property, including purchased to pay a penalty if you are required to file Form 8886 but don't
livestock held for draft, breeding, sport, or dairy purposes. See do so. You may also have to pay interest and penalties on any
Pub. 225 for more information on how to report various farm reportable transaction understatements. For more information
losses, such as losses due to death of livestock or damage to on reportable transactions, see the Instructions for Form 8886.
crops or other farm property. Farm Owned and Operated by Spouses
• Form 4797 to report sales, exchanges, or involuntary
conversions (other than from a casualty or theft) of certain farm If you and your spouse jointly own and operate a farm as an
property. Also, use this form to report sales of livestock held unincorporated business and share in the profits and losses, you
for draft, breeding, sport, or dairy purposes. can be taxed as a partnership and file Form 1065, or you each
• Form 4835 to report rental income based on crop or can file Schedule F (Form 1040) as a qualified joint venture.
livestock shares produced by a tenant if you didn't materially
participate in the management or operation of a farm. This Qualified Joint Venture
income isn't subject to self-employment tax. See Pub. 225. If you and your spouse each materially participate as the only
• Form 6198 to figure your allowable loss if you have a members of a jointly owned and operated farm, and you file a
business loss and you have amounts invested in the business joint return for the tax year, you can elect to be treated as a
for which you aren't at risk. qualified joint venture instead of a partnership. This election in
• Form 7205 is used to claim the section 179D deduction most cases won't increase the total tax owed on the joint return,
for qualifying energy efficient commercial building expenses. but it does give each of you credit for social security earnings
• Form 8300 to report cash payments over $10,000 on which retirement benefits are based and for Medicare cover-
received in a trade or business. age without filing a partnership return. For an explanation of
• Form 8582 to figure your allowable loss from passive “material participation,” see the Instructions for Schedule C
activities. (Form 1040), line G, and Line E, later.
• Form 8824 to report like-kind exchanges. Making the election. To make this election, you must divide
• Form 8990 to figure any interest expense limitation and
carryover amount. However, a small business taxpayer is not all items of income, gain, loss, deduction, and credit attributa-
subject to the business interest expense limitation and is not ble to the farming business between you and your spouse in ac-
required to file Form 8990. Also, certain farming businesses cordance with your respective interests in the venture. Each of
and specified agricultural or horticultural cooperatives can you must file a separate Schedule F (Form 1040). On each line
make an election not to have the limitation apply. of your separate Schedule F (Form 1040), you must enter your
share of the applicable income, deduction, or loss. Each of you
• Form 1045 to request a refund resulting from a carryback
loss. must also file a separate Schedule SE (Form 1040) to pay
self-employment tax, as applicable.
Single-member limited liability company (LLC). Generally,
a single-member domestic LLC isn't treated as a separate entity As long as you remain qualified, your election can't be re-
for federal income tax purposes. If you are the sole member of voked without IRS consent.
a domestic LLC engaged in the business of farming, file For more information on qualified joint ventures, go to
Schedule F (Form 1040). However, you can elect to treat a do- IRS.gov./QJV.
mestic LLC as a corporation. See Form 8832 for details on the
election. Exception—Community Income
Heavy highway vehicle use tax. If you use certain highway If you and your spouse wholly own an unincorporated farming
trucks, truck-trailers, tractor trailers, or buses in your farming business as community property under the community property
business, you may have to pay a federal highway motor vehicle laws of a state, foreign country, or U.S. possession, you can
use tax. See the Instructions for Form 2290 to find out if you treat your wholly owned, unincorporated business as a sole
owe this tax and go to IRS.gov/Trucker for the latest develop- proprietorship, instead of a partnership. Any change in your re-
ments. porting position will be treated as a conversion of the entity.
Information returns. You may have to file information re- Report your income and deductions as follows.
turns for wages paid to employees, certain payments of fees • If only one spouse participates in the business, all of the
and other nonemployee compensation, interest, rents, royalties, income from that business is the self-employment earnings of
real estate transactions, annuities, and pensions. For details, see the spouse who carried on the business.

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