JaninMi Posted January 10, 2013 Report Share Posted January 10, 2013 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. Quote Link to comment Share on other sites More sharing options...
Ray in Ohio Posted January 10, 2013 Report Share Posted January 10, 2013 I would say it has to go on Schedule E. Quote Link to comment Share on other sites More sharing options...
rfassett Posted January 10, 2013 Report Share Posted January 10, 2013 Line 21 - other income. Definitely not Schedule F. Quote Link to comment Share on other sites More sharing options...
Edward Posted January 11, 2013 Report Share Posted January 11, 2013 The initial payment the farmer receives is called a LEASE BONUS which must be reported on Sch E . (Source, pages 8-3 and 8-4, QF 'Individuals - Special Tax Situations". Quote Link to comment Share on other sites More sharing options...
JaninMi Posted January 14, 2013 Author Report Share Posted January 14, 2013 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! Quote Link to comment Share on other sites More sharing options...
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