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Screen 4835-2 - Farm Rental - Expenses (1065)
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Overview
Use this screen to enter farm expenses if the partnership is a landowner or sub-lessor of the farm. The expenses from the Farm Rental Income and Expenses Worksheet transfer to Form 8825.
Expenses
Car and truck expenses
This amount transfers to Form 8825, line 4 - Auto and travel.
Chemicals / Custom hire (machine work) / Feed / ... / Gasoline, fuel, and oil / Pensions and profit sharing plans / Rent or lease - other (land, animals, etc) / Seeds and plants / ... / Supplies / Veterinary, breeding, and medicine
These amounts transfer to Form 8825, line 15 - Other.
Conservation expenses
If you enter a positive amount of conservation expenses, the deduction is limited to 25 percent of the gross farm rental income. A Schedule M-1 or Schedule M-3 reconciling adjustment generates for the nondeductible portion. If you enter a negative number, the application converts it to a positive number, does not limit the deduction based on income, and does not create a Schedule M-1 or Schedule M-3 reconciling adjustment.
note
- To allocate the nondeductible portion of conservation expense to partners using ratios different from the profit-sharing percentages, select the Ptr Alloc button in the Nondeductible conservation expenses field in Screen M1M2 (for Schedule M-1 reconciling adjustments) or Screen M3-2 (for Schedule M-3 reconciling adjustments).
- This amount transfers to Form 8825, line 15 - Other.
Employee benefits other than pension and profit-sharing
Enter the amount of employee benefits other than pension and profit-sharing before the reduction for the credit for small employer health insurance premiums. The application reduces the amount entered in this field by the amount of the allowable Form 8941 credit based on entry in Screen Cr-5 for the associating activity before transferring the net amount to Form 8825, line 15 - Other.
Depreciation expense (Force)
Enter an amount to override the depreciation calculated from either the asset module or Screen 4562 for this farm rental. This amount transfers to Form 8825, line 14 - Depreciation.
Insurance (other than health insurance)
This amount transfers to Form 8825, line 7 - Insurance.
Interest - mortgage (for example, paid to banks) / other
The sum of these amounts transfers to Form 8825, line 9 - Interest.
Labor hired
Enter the amount of labor
before
any reductions for allowable credits. The application reduces the amount entered in this field by the amount of the allowable credits for Forms 5884, 8932, and 8994 based on entries in Screens Cr, Cr-3, Cr-4, and Cr-5 for the associating activity before transferring the net amount to Form 8825, line 15 - Other.Rent or lease – vehicles, machinery, and equipment
Enter the amount of rent or lease expense for vehicles, machinery, and equipment. The application reduces this amount by the amount of lease inclusion before transferring this amount to Form 8825, line 15 - Other.
Lease inclusion (Force)
Enter an amount to override the lease inclusion calculated from the asset module. If the lease inclusion is zero, enter 0 (zero). The application reduces rent or lease expense for vehicles, machinery, and equipment expense before transferring this amount to Form 8825, line 15 – Other.
Repairs and maintenance
This amount transfers to Form 8825, line 10 - Repairs.
Taxes
Enter the amount of tax expenses
before
the reduction for the credit for employer Social Security and Medicare taxes paid on certain employee tips. The application reduces the amount entered in this field by the amount of the allowable Form 8846 credit based on entry in Screen Cr-4 for the associating activity before transferring the net amount to Form 8825, line 11 - Taxes.Utilities
This amount transfers to Form 8825, line 12 - Utilities.
Other expenses
Use the statement to enter other expenses not entered elsewhere. The items entered in the statement add to the following adjustments in the printed statements for Farm Rental Income and Expenses Worksheet and Form 8825, line 15 - Other.
- Amortization (Screen 4835-2)
- Preproductive period expenses (Screen 4835-2)
- Meals expenses (Screen 4835-2)
- Guaranteed payments (Screen 4835-2)
- Start-up expenses (asset module)
- Organization costs (asset module)
- Form 6765, Credit for Increasing Research Activities (Screen Cr-2)
- Form 8820, Orphan Drug Credit (Screen Cr-2)
- Form 8826, Disabled Access Credit (Screen Cr-2)
- Form 8881, Credit for Small Employer Pension Plan Startup Costs (Screen Cr-5)
- Form 8882, Credit for Employer-Provided Childcare Facilities and Services (Screen Cr-5)
Amortization (Force)
Enter an amount to override the amortization calculated from either the asset module or Screen 4562 for this farm rental. This amount transfers to Form 8825, line 15 - Other.
Preproductive period expenses
Enter the amount of preproductive period expenses. The amount you enter prints as a negative number with the description "263A." This amount transfers to Form 8825, line 15 – Other and to Schedule K, line 13d – Other deductions.
note
- This amount also transfers to Schedule K, line 13d – Other deductions. Enter an amount, including 0 (zero), in the Preproductive period expenses (Force) field on Screen SepK if you want to override the amount that transfers.
- Use the Ptr Alloc field on Screen SepK to allocate the amount of preproductive period expenses reported on Schedule K to partners.
Meals subject to 50% limit
Enter 100 percent of the meals expenses. The application automatically reduces this amount by 50 percent before transferring this amount to Form 8825, line 15 – Other. A Schedule M-1 or Schedule M-3 reconciling adjustment also generates for the nondeductible portion.
note
- To allocate the nondeductible portion of meals to partners using ratios different from the profit-sharing percentages, select the Ptr Alloc button in the Nondeductible meals field in Screen M1M2 (for Schedule M-1 reconciling adjustments) or the Meals, Permanent Difference field in Screen M3-3 (for Schedule M-3 reconciling adjustments).
- Enter entertainment expenses in the Nondeductible entertainment field in Screen M1M2 or the Entertainment field in Screen M3-3.
Meals subject to DOT 80%
Enter 100 percent of the meals expense for employees that are subject to the hours of service limitations of the Department of Transportation (DOT). The application automatically reduces this amount by 20 percent before transferring this amount to Form 8825, line 15 – Other. A Schedule M-1 or Schedule M-3 reconciling adjustment also generates for the nondeductible portion.
Examples of qualifying employees are certain air transportation employees, interstate truck and bus operators, railroad employees, and merchant mariners under Coast Guard regulations.
note
- To allocate the nondeductible portion of meals to partners using ratios different from the profit-sharing percentages, select the Ptr Alloc button in the Nondeductible meals field in Screen M1M2 (for Schedule M-1 reconciling adjustments) or the Meals, Permanent Difference field in Screen M3-3 (for Schedule M-3 reconciling adjustments).
- Enter entertainment expenses in the Nondeductible entertainment field in Screen M1M2 or the Entertainment field in Screen M3-3.
Total guaranteed payments: Health insurance
Enter the amount of health insurance considered guaranteed payments to partners. The amount in this field combines with the amounts in the
Total guaranteed payments: Pensions and IRAs
and Total guaranteed payments: Other
fields before transferring the net amount to Form 8825, line 15 – Other. This amount also transfers to Schedule K, line 4 – Guaranteed payments and line 13 – Other deductions.note
Use the Ptr Alloc field on Screen SepK to allocate the amount of health insurance considered guaranteed payments reported on Schedule K, lines 4 and 13 to partners.
Total guaranteed payments: Pensions and IRAs
Enter the amount of pensions and IRAs considered guaranteed payments to partners. The amount in this field combines with the amounts in the
Total guaranteed payments: Health insurance
and Total guaranteed payments: Other
fields before transferring the net amount to Form 8825, line 15 – Other. This amount also transfers to Schedule K, line 4 – Guaranteed payments and line 13 – Other deductions.note
Use the Ptr Alloc field on Screen SepK to allocate the amount of pensions and IRAs considered guaranteed payments reported on Schedule K, lines 4 and 13 to partners.
Total guaranteed payments: Other
Enter the amount of deductible guaranteed payments to partners not related to health insurance or pensions and IRAs. The amount in this field combines with the amounts in the
Total guaranteed payments: Health insurance
and Total guaranteed payments: Pensions and IRAs
fields before transferring the net amount to Form 8825, line 15 – Other. This amount also transfers to Schedule K, line 4.note
Use the
Ptr Alloc
field on Screen SepK to allocate the amount of deductible guaranteed payments reported on Schedule K, line 4 to partners.