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Federal input screens

Screen 4835 - Farm Rentals (1040)

Overview

Use this screen to enter general farm information and all farm income and deductions if the client is a landowner or sub-lessor of a farm.
Use the State allocation spreadsheet for UltraTax/1040 multi-state processing for the 4835 screen. Enter all multi-state data at the federal level via the State allocation spreadsheet for each unit of a single entity.
With the State allocation spreadsheet, individual allocation percentages and allocated net income amounts, in total, are not required to foot with the federal amount, so individual state's law differences can be conveniently taken into consideration.
For more information, refer to Processing multiple-state returns.
Auto Expenses
Enter all car / truck information in the asset module even if using the standard mileage method.
At-Risk Limitation
Enter amounts that are at-risk in the 6198 screen. See the overview of the 6198 screen for further information.
Source data entry
The UltraTax CS Source Data Entry utility enables you to enter data on facsimile versions of forms your clients submit for the preparation of their tax returns. Once the facsimile forms are completed, you can export the data and transfer it into your client data files via the data sharing feature. For more information including a list of available facsimiles, refer to the UltraTax CS Source Data Entry overview.

Form 4835 - General Questions

Enter information in this section to complete the top part of Form 4835 and to classify income and expenses.
When processing a state return, enter the two-character postal code for the state to which this unit belongs. This code is used by the various state applications to help determine in-state and out-of-state amounts.
Use the St CO screen to enter the percentage of federal net income or the amount of net income attributable to a specific state for Schedules C, E, F and Form 4835 activities. This screen is also used to enter state-specific (Arkansas, California, Hawaii, Kentucky, Massachusetts, Montana, New York, Oregon, and Wisconsin only) passive (regular and AMT) and section 179 carryover information (including Alabama and New Hampshire) for Schedules C, E, F and Form 4835 activities. UltraTax CS automatically transfers information entered in this screen to the appropriate state for use in state specific calculations. For more information, access the input screen help for the appropriate state application by pressing F1 from within a state input screen.
Refer to the State fields in UltraTax/1040 for more information.
Active participation is assumed in the operation of this farm. Enter
2
 if the client did not actively participate.
It is assumed that income from a farm rental activity is included in net investment income for Form 8960, unless the
Passive activity code
 on the 4835-2 screen is
3
 or
4
.
Enter a code in this field to assign the net investment income treatment for this activity if it is different from the default treatment. Enter
1
 if the income from this trade or business should be included in the calculation of net investment income on Form 8960. Enter
2
 if the income should not be included.
In the statement, enter the applicable state use code for processing the 1040 state return and the appropriate ID number for the state return selected.
Code
Description
State number
1
Form OP-424: CT
Enter Seven-digit SOS ID number
2
Form IT-204-LL: NY
State number is not applicable
3
Form 568: CA
Enter the 10- or 12-digit SOS file number. If no number has been assigned, enter
None
,
None 1
, etc.
4
FAE 170: TN
Enter Tennessee account number. If no number has been assigned, enter
None
,
None 1
, etc.
5
Form 725: KY
Enter Kentucky six-digit LLC account number
7
Form 05-158: TX
Enter 10-digit SOS file number
8
Tax identification number: HI
Enter Hawaii general/excise use 12-digit tax identification number. Do not include letters or dashes.
9
Form LC: KS
Enter up to seven-digit business entity ID number. If no number has been assigned, enter
None
.
10
Qualified oil & gas activity: MI
State number is not applicable
11
Personal service income: SC
State number is not applicable
12
Form PPT: AL
Enter six-digit SOS file number
13
Form RI-1065: RI
Enter the nine-character SOS ID number
14
Form BT Summary (LLC): NH
Enter the nine-character Department Identification Number (DIN), format NL and seven numbers
15
Form LLC Annual Report: MA
Enter the nine-digit ID number assigned by the Secretary of Commonwealth
16
LLC Franchise Tax Report: AR
Enter the nine-digit Arkansas filing number
19
Forms PHL NPT/BIRT: PA
Enter the 7-digit Philadelphia account number
21
Schedule DE: WI
State number is not applicable
To activate AR, CA, KS, KY, MA, NC, NH, NY, PA, TN, and TX LL/LLC returns, choose File > Client properties, select desired state tab, and mark the box for the form/return in the Other return(s) group box.
Enter the city code for the city in which the farm is located. This code is used by the various state / city applications to aid in determining in-city and out-of-city income. After you select a city code, the
City name
 field completes automatically.
To access the State allocation spreadsheet, the following conditions must be present in the current client.
  • The client being processed must include at least one state return.
  • You must be viewing Client Organizer Data Entry or Input Screen Data Entry.
  • For the 4835 and F screens, data must exist in the
    Description
     field.
  • For the C screen, data must exist in
    Principal business
     field.
  • For the Rent screen, data must exist in
    Property kind/location
     field.
When these conditions have been met, access the spreadsheet by clicking the Allocation icon in this screen.
Two methods (percentage or amount) of allocation can be used to allocate federal unit net income to the applicable states displayed in the State allocation spreadsheet.
  • Percentage:
     Enter a percentage in XXX.XX format in the first field available in the State allocation spreadsheet. Select the state to which this percentage applies from the fieldview. Click the Apply button. UltraTax CS automatically calculates the amounts attributable to that state and display the amounts in the spreadsheet. The percentage entered for that particular state will appear below the state name for easy reference. If enabled, individual item amounts can be changed (overwritten) on the spreadsheet from the calculated amount.
  • Amount:
     In cases where a percentage of the federal amounts do not apply, individual item amounts, if enabled, may be entered in the spreadsheet for the applicable state. Zero (0) is a valid entry and will prevent the state amount from defaulting to the federal calculated amount. If an individual item amount field is left blank, the federal amount, if present, will be used in the state's calculation.
Build-up states that report or otherwise calculate income from these Schedules C, E, F and Form 4835 activities on an amount by amount basis may be allocated using a percentage only, while passive carryover amounts may be allocated by entering the state specific carryover amounts within the State allocation spreadsheet.
Other states, which are typically AGI states that require net activity amounts only, may be allocated by percentage or by entering the net amount of activity income/(allowable loss) attributable to the specific state.
The State allocation spreadsheet may be printed in a report format for future reference. Click the Print or Preview button in the lower portion of the spreadsheet. If licensed, you can also print to FileCabinet CS.
Enter
X
 to indicate that this farm rental activity meets the definition of farming business for income averaging purposes. See the instructions for Schedule J - Income Averaging for Farmers and Fishermen for definition details. UltraTax CS includes the activities income or loss in determining the amount of taxable income from farming and fishing. Taxable farming and fishing income is then used to determine the amount of "Elected farm income" on Schedule J, line 2a when income averaging is beneficial to use.
If the taxpayer is married, files a separate federal return, and resides in one of the following community property states - AZ, CA, ID, LA, NM, NV, TX, WA, or WI (or for registered domestic partners, files a Single or Head of Household federal return, and resides in CA, NV or WA) - use this field to identify whether or not the farm rental income/loss is generated from community property. By default, a blank entry (i.e. no entry) is treated as community property and an entry of
N
 as non-community property (i.e. separate property). Farm Rental units indicated as community property will be allocated 50/50 to the taxpayer and the spouse when two separate clients are created via the Filing Status Optimization utility with the Split income according to Community Property rules option enabled.
For more information about the Filing Status Optimization utility and the option for community property returns, refer to Using the Filing Status Optimization utility (1040) and Filing Status Optimization dialog.
Enter
X
 to indicate that this Form 4835 activity was not active for the current tax year. Any data in the activity's input screens and asset detail is ignored. This unit will proforma to next year. When activity resumes, unmark this field.
Enter
1
 for a complete disposition of the activity. Prior-year suspended losses will be released and the activity, plus any other related input screens, will be deleted during next year's proforma process. If the activity has any passive activity credit carryforwards, the activity will proforma to keep the passive credits available to use against other passive income, per Form 8582-CR instructions.
Enter
2
 if this is a passive activity that was sold on an installment basis. UltraTax CS treats installment dispositions as follows:
  • UltraTax CS calculates any allowed losses for the current tax year by multiplying the overall loss by the ratio of current-year gain recognized, divided by unrecognized gain as of the beginning of the tax year. Losses in excess of the allowed amount are suspended and proforma'd to the following tax year.
  • When the gain recognized in the current year exceeds all of the current and carryforward losses, all losses are allowed in the current year. Also, UltraTax CS deletes any other related input screen during next year's proforma process. Any activity that is coded
    2
     with no passive loss carryovers, plus any other related input screen, is deleted during next year's proforma process.

Income Items

Use this field to enter income from the production of livestock, produce, grains, and other crops.
Federal Withholding
State Withholding
State withholding may be entered in the statement attached to this field. If state withholding is present, to indicate who was issued Form 1099-B with state withholding, also enter a T or S in the T/S/J column and the state postal code associated to the state withholding in the Withholding State column. Many states include withholding records in the state electronic file or on withholding forms, and additional information related to the withholding may be required and entered at the state level. Entering a T/S/J code or postal code here does not modify the state source income for the activity. Use the Multi-state allocation spreadsheet to allocate the activity income and use the T, S, J field to indicate to whom the activity income or loss belongs.
When an amount is entered in the
Distributions received from cooperatives - total
 field, the same amount is automatically entered in the
Distributions received from cooperatives - taxable
 field. You can enter a different amount in the
Distributions received from cooperatives - taxable
 field, including
0
 (zero), if applicable.
When you enter an amount in the
Agricultural program payments - total
 field, the
Agricultural program payments - taxable
 field completes automatically with the same amount. You can enter a different amount in the
Agricultural program payments - taxable
 field, including
0
 (zero), if applicable.
In the attached statement, enter a description and amount of any Commodity Credit Corporation (CCC) loan proceeds reported as income under the election described in the Schedule F instructions for lines 5a through 5c. Amounts transfer to Form 4835, line 4a. A custom fieldview is available in the attached statement.
Enter
X
 in this field to elect to include CCC loans in income. The tax election automatically prints with the return. If the return is being filed electronically, the tax election will be included in the electronic file.
When you enter an amount in the
Total CCC loans forfeited statement
 field, the
Taxable CCC loans forfeited statement
 field completes automatically with the same amount. Enter a different amount in the
Taxable CCC loans forfeited
 field, including
0
 (zero), if applicable.
When you enter an amount in the
Total crop insurance proceeds received in the current year
 field, the
Taxable crop insurance proceeds received in the current year
 field completes automatically with the same amount. Enter a different amount in the
Taxable crop insurance proceeds received in the current year
 field, including
0
 (zero), if applicable.
Use this statement to make the election to defer the income from crop insurance proceeds until next year. The information entered in this statement will print on the election statement with the return.
Enter any other income in the attached statement. A custom fieldview is available in the attached statement.
Use this statement to elect to defer income from the sale of livestock due to weather-related conditions under Section 451(e) and Regulation 1.451.7. Enter the information required for the election as outlined in IRS Publication 225 - Farmer's Tax Guide. The election will be used only for farm activities using the cash accounting method. The tax election prints automatically with the return. If the return is being filed electronically, the tax election is included in the electronic file.
Use this statement to defer recognition of gain from the sale of draft, dairy, or breeding livestock due to weather-related conditions under Section 1033(e). See Internal Revenue Code Section 1033(e) for more information. The tax election prints automatically with the return. If the return is being filed electronically, the tax election is included in the electronic file.
Use these fields to enter the information required to complete Form 4797, Part IV, Recapture Amounts Under Section 179 and 280F(b)(2) When Business Use Drops to 50% or Less. The recapture amount reports as other income on Form 4835.
In the
Section 179...
 fields, enter amounts to calculate the section 179 recapture.
In the
Section 179... (Force)
 fields, enter amounts to override (force) the calculated amounts, if necessary.

Expenses

Enter an amount in this field, or a
0
 (zero) if applicable, if you want to override the calculated amount from the Auto Worksheet for car / truck expenses.
If you retrieve depreciation expense using tax code 712 or manually enter the expense amount here, the amount in this field is used rather than the amount calculated on Form 4562.
The calculated amount on the Auto Worksheet for vehicle rentals is added to any amount you enter in this field.
Enter
11
 in the
Code
 field to indicate the LLC tax paid. Amounts entered with code 11 are subtracted from the activities expenses on the California 540/540NR return.
Enter
13
 in the
Code
 field to indicate the taxes are attributable to the Unincorporated Business Franchise Tax. Amounts using code 13 do not transfer to the
Taxes
 statement on the District of Columbia UB4835 screen.
Only use tax code 730 to retrieve amortization from Write-Up CS into the attached statement if you do not have amortization amounts in a corresponding Form 4562 in UltraTax CS. Otherwise, the amortization amounts appear twice when you print the statement. A custom fieldview is available in the attached statement.
Enter the preproductive period expenses that are being capitalized. The amount you enter prints as a negative number in the
Other expenses
 field with the description 263A.
Enter a description of each eligible property for which the taxpayer is applying the safe harbor provision under IRC Regulation 1.263(a)-3(h). For purposes of this election, in general, a small taxpayer is defined as an individual whose average annual gross receipts for the three preceding tax years is less than or equal to $10 million. Under the safe harbor, the taxpayer may deduct (rather than capitalize) certain amounts paid for improvements made to the eligible building property. The election prints automatically and is included in the contents of the e-file, when filing electronically. The election is applied on a year-by-year basis, and once made, the election is irrevocable.
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