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Rent based on crop or livestock sharing. In that case, your net income from Form 4835 is carried over to Schedule E, Supplemental Income and Loss. It is treated like rental income and will not be subject to self-employment tax.
Crop share landlords who do not materially participate in the farming activity report their income on IRS Form 4835, Farm Rental Income and Expenses. Typical cash rent landlords are not farmers. They report their income on IRS Form 1040, Schedule E, Supplemental Income and Loss.
Purpose of Form. If you were the landowner (or sub-lessor) and did not materially participate (for self-employment tax purposes) in the operation or management of the farm, use Form 4835 to report farm rental income based on crops or livestock produced by the tenant.
Losses on Form 4835 are passive, which are limited to between $0 and $25,000, depending on the income level.
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