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Tax Topic Index

Tax Topics

About Tax Map Website
Publication 225
Farmer's Tax Guide
Introduction, Useful Items and Important Changes
For use in Preparing 2014 Returns

Chapter 1
Importance of Records

Benefits of Recordkeeping

Kinds of Records To Keep

How Long To Keep Records

Chapter 2
Accounting Methods

Accounting Methods

Cash Method
Accrual Method
Farm Inventory
Cash Versus Accrual Method
Special Methods of Accounting
Combination Method
Changes in Methods of Accounting

Chapter 3
Farm Income

Schedule F (Form 1040)

Sales of Farm Products

Sales Caused by Weather-Related Conditions

Rents (Including Crop Shares)

Crop Shares

Agricultural Program Payments

Commodity Credit Corporation (CCC) Loans
Conservation Reserve Program (CRP)
Crop Insurance and Crop Disaster Payments
Feed Assistance and Payments
Cost-Sharing Exclusion (Improvements)
Payments Under the Agricultural Act of 2014
Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008
Tobacco Quota Buyout Program Payments
Other Payments
Payment to More Than One Person

Income From Cooperatives

Patronage Dividends
Per-Unit Retain Certificates

Cancellation of Debt

General Rule

Income From Other Sources

Income Averaging for Farmers

Elected Farm Income (EFI)
How To Figure the Tax
Effect on Other Tax Determinations
Tax for Certain Children Who Have Unearned Income
Alternative Minimum Tax (AMT)
Schedule J

Chapter 4
Farm Business Expenses

Deductible Expenses

Prepaid Farm Supplies
Prepaid Livestock Feed
Labor Hired
Repairs and Maintenance
Breeding Fees
Fertilizer and Lime
Rent and Leasing
Business Use of Your Home
Truck and Car Expenses
Travel Expenses
Marketing Quota Penalties
Tenant House Expenses
Items Purchased for Resale
Other Expenses

Domestic Production Activities Deduction

Capital Expenses

Nondeductible Expenses

Personal, Living, and Family Expenses
Other Nondeductible Items

Losses From Operating a Farm

At-Risk Limits
Passive Activity Limits
Excess Farm Loss Limit

Not-for-Profit Farming

Chapter 5
Soil and Water Conservation Expenses

Business of Farming

Plan Certification

Conservation Expenses

Assessment by Conservation District

Assessment for Depreciable Property

25% Limit on Deduction

When to Deduct or Capitalize

Sale of a Farm

Chapter 6
Basis of Assets

Cost Basis

Real Property
Allocating the Basis
Uniform Capitalization Rules

Adjusted Basis

Increases to Basis
Decreases to Basis

Basis Other Than Cost

Taxable Exchanges
Involuntary Conversions
Nontaxable Exchanges
Property Received as a Gift
Property Transferred From a Spouse
Inherited Property
Property Distributed From a Partnership or Corporation

Chapter 7
Depreciation, Depletion, and Amortization

Overview of Depreciation

What Property Can Be Depreciated?
What Property Cannot Be Depreciated?
When Does Depreciation Begin and End?
Can You Use MACRS To Depreciate Your Property?
What Is the Basis of Your Depreciable Property?
How Do You Treat Repairs and Improvements?
Do You Have To File Form 4562?
How Do You Correct Depreciation Deductions?

Section 179 Expense Deduction

What Property Qualifies?
What Property Does Not Qualify?
How Much Can You Deduct?
How Do You Elect the Deduction?
When Must You Recapture the Deduction?

Claiming the Special Depreciation Allowance

What is Qualified Property?
How Can You Elect Not To Claim the Allowance?
When Must You Recapture an Allowance

Figuring Depreciation Under MACRS

Which Depreciation System (GDS or ADS) Applies?
Which Property Class Applies Under GDS?
What Is the Placed-in-Service Date?
What Is the Basis for Depreciation?
Which Recovery Period Applies?
Which Convention Applies?
Which Depreciation Method Applies?
How Is the Depreciation Deduction Figured?
How Do You Use General Asset Accounts?
When Do You Recapture MACRS Depreciation?

Additional Rules for Listed Property

What Is Listed Property?
What Is the Business-Use Requirement?
Do the Passenger Automobile Limits Apply?


Who Can Claim Depletion?
Figuring Depletion


Business Start-Up Costs
Reforestation Costs
Section 197 Intangibles

Chapter 8
Gains and Losses

Sales and Exchanges

Determining Gain or Loss
Like-Kind Exchanges
Transfer to Spouse

Ordinary or Capital Gain or Loss

Capital Assets
Noncapital Assets
Hedging (Commodity Futures)
Converted Wetland and Highly Erodible Cropland
Sale of a Farm
Foreclosure or Repossession

Chapter 9
Dispositions of Property Used in Farming

Section 1231 Gains and Losses

Depreciation Recapture

Section 1245 Property
Section 1250 Property
Installment Sale
Other Dispositions

Other Gains

Chapter 10
Installment Sales

Installment Sale of a Farm

Installment Method

Figuring Installment Sale Income
Payments Received or Considered Received


Chapter 11
Casualties, Thefts, and Condemnations

Casualties and Thefts

Farming Losses
How To Figure a Loss
Deduction Limits on Losses of Personal-Use Property
When Loss Is Deductible
Proof of Loss
Figuring a Gain

Other Involuntary Conversions

Irrigation Project
Livestock Losses
Tree Seedlings

Postponing Gain

Replacement Property
Replacement Period
How To Postpone Gain

Disaster Area Losses

Reporting Gains and Losses

Chapter 12
Self-Employment Tax

Why Pay Self-Employment Tax?

How To Pay Self-Employment Tax

Who Must Pay Self-Employment Tax?

Figuring Self-Employment Earnings

Landlord Participation in Farming

Methods for Figuring Net Earnings

Regular Method
Farm Optional Method
Nonfarm Optional Method
Using Both Optional Methods

Reporting Self-Employment Tax

Chapter 13
Employment Taxes

Farm Employment

Family Employees

Crew Leaders

Social Security and Medicare Taxes

Federal Income Tax Withholding

Required Notice to Employees About Earned Income Credit (EIC)

Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes

Federal Unemployment (FUTA) Tax

Reporting and Paying FUTA Tax

Chapter 14
Fuel Excise Tax Credits and Refunds

Fuels Used in Farming

Dyed Diesel Fuel and Dyed Kerosene

Fuels Used in Off-Highway Business Use

Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines

How To Claim a Credit or Refund

Claiming a Credit
Claiming a Refund

Including the Credit or Refund in Income

Chapter 15
Estimated Tax

Special Estimated Tax Rules for Qualified Farmers

Qualified Farmer
Special Rules for Qualified Farmers

Estimated Tax Penalty for 2014

Chapter 16
How To Get Tax Help

The Taxpayer Advocate Service Is Here To Help You

Low Income Taxpayer Clinics