Farms include ranches, ranges and orchards. While some may raise cattle, poultry or fish and others grow fruits or vegetables, all will report their farm income on Schedule F, Profit or Loss from Farming. If you own a farm or ranch, check out these ten key tax tips
Here are the top 3:
- Crop insurance. Insurance payments from crop damage count as income. Generally, you should report these payments in the year you get them.
- Sale of items purchased for resale. If you sold livestock or items that you bought for resale, you must report the sale. Your profit or loss is the difference between your selling price and your basis in the item. Basis is usually the cost of the item. Your cost may also include other expenses such as sales tax and freight.
- Weather-related sales. Bad weather such as a drought or flood may force you to sell more livestock than you normally would in a year. If so, you may defer tax on the gain from the sale of the extra animals.
Check out all 10 here: Ten Key Tax Tips for Farmers and Ranchers – IRS Tax Tip 2016-15