How to handle farmland rental?

Forum|Forum|4 years ago
May 8, 2021
1 reply
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Dear Tax and TurboTax Specialists,

I use TurboTax Premium on a Windows 10 computer, and own a piece of land. I plan to rent out the tillable portion to a farmer for a fixed amount of cash. Questions:

1. Why would the farmer ask me for my social security number when paying me the rent?

2. Is it a must that I give out my social security number to the farmer?

3. Can I give the EIN of an LLC that I used years ago before retirement instead of my social security number?

4. If yes to 3 above, what is the best way to report the rental income on my tax return?

Thank you very much!

Best answer by AmeliesUncle

Dear TurboTax Experts,

I rented out my land to a farmer in 2021, and received a 1099-MISC for rent based on acreage.

In TT, I entered the 1099-MISC in:

1099-MISC and Other Common Income

Income from Form 1099-MISC

After entering the rent info page, a page

Source of 1099-MISC Income

appears, and I must click one of 4 listed sources.

Based on early expert advice, I am inclined to click on the first bullet:

Rental income from the rental of real estate (Schedule E)

But it seems the 3rd bullet:

Farm rental income

seems more applicable.

Question 1: Which bullet should I click?

Question 2: I had to spend money to advertise the land to find a farmer and improve access roads for the farmer. Is this money deductible? Where do I enter the expenditures?

Thank you so much!

The first bullet. You are renting out land, not a farm. You are receiving a flat cash rate for the land, not a portion of the farm's production.

The program should walk you through the expenses.

AmeliesUncle

His business is paying you rent, so he may be required to issue you a 1099.

You must fill out a W-9 for him, which includes your identification number.

Rather using your Social Security Number, you should get an EIN in your name (it is easy and free at IRS.gov). If you other EIN is in the name of an LLC, that should not be used.

Report the rental of land on Schedule E as a rental property.

loyal-but---userAuthor

I obtained an EIN per expert advice above, which was used by the farmer renting my land to issue me a 1099-MISC. But my income tax return uses my personal social security number.

When completing Schedule E related info on my 2021 income tax return, where do I enter the EIN so it is connected to my personal social security number?

Thank you very much!

PatriciaV

Employee

Your SSN is linked to the EIN used for your rental business. For this reason, you are not required to include the EIN on Schedule E. However, at the end of the Rental Property interview, you should see a page "Name and employer ID number for this rental." You can enter the EIN here.

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