JaninMi

Thank you for your feed back. I would also report it on Sch E. That was my initial response to him, but then I got to over thinking it. I just was trying to save this guy some money, as the lease was for a very large amount. Thanks again!

I received a call from a local farmer, who leased his 900 acres of farm land. This was a oil lease for 5 years. He has received the check. He is a long time active crop and general farmer. His question to me was could he report the income on his Sch F? I told him it should be reported on Sch E, rent income. But now I'm wondering if it could be reported on Sch F, I know it would be subject to self imployment taxes, but his expenses and depreciation could reduce the income some what. Any advise would be appreciated. Thank you.