Form 4835 — Farm Rental Income and Expenses
Form 4835 is used by landlords who rent farmland under a crop-share or cash rent arrangement and do not materially participate in the farming operation. Farm rental income reported on Form 4835 is passive income — it is not subject to self-employment tax. For tax professionals, Form 4835 is important for clients who have inherited or own farmland and rent it to active farmers.
Key Rules and Authority
| Rule | Detail |
|---|---|
| SE Tax | Not applicable — passive income |
| Crop Share FMV | Report at fair market value when received |
| Cash Rent | Report when received |
| Material Participation | If landlord materially participates, use Schedule F |
| Passive Loss Rules | Losses subject to passive activity limitations |
| Rental Expenses | Deductible — depreciation, taxes, insurance |
Form 4835 vs. Schedule F — The Key Distinction
The form used to report farm income depends on whether the taxpayer is an active farmer or a passive landlord. Schedule F is used by farmers who actively operate the farm — their income is subject to self-employment tax. Form 4835 is used by landlords who rent farmland and do not materially participate in the farming operation — their income is passive and not subject to SE tax. The material participation test for farming is the same as for other activities: the landlord must participate in the farming operation for more than 500 hours per year, or meet one of the other material participation tests under §469. A landlord who simply collects rent and makes no farming decisions uses Form 4835.
Frequently Asked Questions
Master Farm Rental Tax Planning for Your Clients
Form 4835 is one of 100+ IRS forms covered in the Tax Intelligence Engine. Access the full library free for tax professionals.
Join the Marketplace — Free for Tax ProsRelated Resources
Explore our tax professional directory and deduction guides.