• Meet Claudell, one of our tax experts.
    TurboTax Live Assisted Basic
    File 100% FREE with expert help: Get live help from tax experts, plus a final review before you file — all free.
    Simple tax returns only.
    See if you qualify. Must file by 3/31.
  1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. IRS Tax Forms /
  5. What is Form 4835: Farm Rental Income and Expenses

What is Form 4835: Farm Rental Income and Expenses

Updated for Tax Year 2022 • December 1, 2022 08:26 AM


As with all businesses, the IRS requires you to report the income and expenses involved with running that business, including a farm rental. If you're the owner of a farm but not the one actively farming the land, generally you'll report your income and expenses using IRS Form 4835. If you're a farmer who actually farms the land, however, you fall under a different tax classification even if you also own the land. The IRS provides instructions for Form 4835 as to whether you should be categorized as a farmer or a landowner.

Farming field of grain during the day

Qualification for Form 4835

The IRS considers "material participation" to be the determining factor as to which farm income tax form you should file. If you're a traditional farmer who raises crops or livestock, you're considered a self-employed business person and you would file using Schedule F, Profit or Loss From Farming.

However, if you merely rent out your land to farmers and do not materially participate in the labor or management of the farming process yourself, you are considered a landowner, not a farmer, according to the IRS. Form 4835 is the way for non-participating farmland owners to report their farm income and expenses.

Income categories

Most landowners contract with farmers under a crop-share arrangement, in which "rent" is paid in crops or livestock produced by the farmer. Form 4835 only recognizes income to a landowner in the year that these crop or livestock shares are converted to cash.

Line 1 of Form 4835 is where you'd report any such income you receive from the production of grains, livestock, produce or other crops. Other types of income you'd report on Form 4835 include:

  • crop insurance proceeds
  • federal disaster proceeds
  • certain Commodity Credit Corporation (CCC) loans
  • cooperative distributions
  • agricultural program payments
  • other income, such as federal and state fuel tax credits or refunds

Once you calculate your gross farm rental income, you'll transfer that amount to Schedule E.

Expense categories

You can reduce you farm rental income with expenses that you pay in the year that you pay them including:

  • car and truck expenses
  • depreciation
  • employee benefit programs
  • freight and trucking
  • gasoline, fuel and oil
  • feed
  • fertilizers and lime
  • interest
  • seeds and plants
  • storage and warehousing
  • supplies
  • utilities
  • repairs and maintenance

As with most businesses, any expenses that can be reasonably attributed to your farm rental business are allowable expenses. You'll deduct your total expenses from your total farm rental income to determine your net taxable income, or loss, from the business. This amount appears on your Schedule E.

Schedule E and Form 1040

Ultimately, reporting your net farm rental income is essentially the same as reporting any type of rental real estate income on Schedule E, "Supplemental Income and Loss." Before you can transfer the amount from Schedule E to Form 1040, you'll have to add any additional "supplemental" income you may have, including income from:

  • royalties
  • partnerships
  • S-corporations
  • estates
  • trusts
  • or real estate mortgage investment conduits (REMICs)

Your combined supplemental income gets transferred to Form 1040. From there, your net income gets treated as ordinary income for tax purposes.

Let a tax expert do your investment taxes for you, start to finish. With TurboTax Live Full Service Premier, our specialized tax experts are here to help with anything from stocks to crypto to rental income. Backed by our Full Service Guarantee. You can also file your own taxes with TurboTax Premier. Your investment tax situation, covered. File confidently with America’s #1 tax prep provider.

Let a tax expert do your investment taxes for you

Get year-round expert advice & every dollar you deserve, guaranteed with Live Full Service Premier.

Get your investment taxes done right

For stocks, crypto, ESPPs, rental property income and more, TurboTax Premier has you covered.

Looking for more information?