When is Form 4835 required?

[Dan]

I am wondering if a retired farmer needs to fill out Form 4835 for a few years after he retires and has turned the land over to a tenant to farm?  The 2021 instructions for Schedule F state: "If you are a retired farmer, you are treated as materially participating in a farming business if you materially participated 5 or more of 8 years preceding your retirement."   

Example:  the farmer retires January 1, 2021.  He materially participated in the farming business for the preceding 8 years.  If the farmer receives a crop share from the tenant, could he report that crop share on Schedule F or would he have to report that crop share on Form 4835?  The farmer did not materially participate in the production of the crop.

Schedule F requires materially participation

Form 4835 only requires actively participation

 

 

[Lee B]

"Landowners and sub-lessors that do not materially participate in the operation or management of the farm (for self-employment tax purposes), file this form to report farm rental income based on crops or livestock produced by the tenant."

[DANRVAN]

5 hours ago, Dan said:

If the farmer receives a crop share from the tenant, could he report that crop share on Schedule F

Basically you file F if you are in the business of growing crops or raising livestock.

You file 4835 to report income and expenses when your land is leased to a tenant on a % basis.

If you lease your farmland on a cash basis you report your income and expense on schedule E.

It is possible for a taxpayer to report on a combination of these.

I can't see any reason in your example to report on F and subject his earnings to Self Employment Tax.