Form 4835 

Department of the Treasury 

Internal Revenue Service 

Farm Rental Income and Expenses

(Crop and Livestock Shares (Not Cash) Received by Landowner (or Sub-Lessor)) 

 (Income Not Subject to Self-Employment Tax)

Attach to Form 1040, 1040-SR, or 1040-NR. 

Go to www.irs.gov/Form4835 for the latest information.

OMB No. 1545-0074

2023

Attachment 

Sequence No. 37

Name(s) shown on tax return Your social security number

Employer ID number (EIN), if any 

A Did you actively participate in the operation of this farm during 2023? See instructions . . . . . . . Yes No

Part I Gross Farm Rental Income—Based on Production. Include amounts converted to cash or the equivalent.

1 Income from production of livestock, produce, grains, and other crops . . . . . . . . . . 1 

2 a Cooperative distributions (Form(s) 1099-PATR) . . 2a 2b Taxable amount 2b

3 a Agricultural program payments (see instructions) . . 3a 3b Taxable amount 3b

4 Commodity Credit Corporation (CCC) loans (see instructions):

a CCC loans reported under election . . . . . . . . . . . . . . . . . . . . . . 4a 

b CCC loans forfeited . . . . . . . . . . . 4b 4c Taxable amount 4c 

5 Crop insurance proceeds and federal crop disaster payments (see instructions):

a Amount received in 2023 . . . . . . . . . . 5a 5b Taxable amount 5b

c If election to defer to 2024 is attached, check here 5d Amount deferred from 2022 . . . . 5d

6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) . . 6 

7 Gross farm rental income. Add amounts in the right column for lines 1 through 6. Enter the total here 

and on Schedule E (Form 1040), line 42 . . . . . . . . . . . . . . . . . . . . . 7 

Part II Expenses—Farm Rental Property. Do not include personal or living expenses.

8 Car and truck expenses (see 

Schedule F (Form 1040) instructions). 

Also attach Form 4562 . . . . . 8 

9 Chemicals . . . . . . . . . 9 

10 Conservation expenses (see instructions) 10 

11 Custom hire (machine work) . . . . 11 

12 Depreciation and section 179 expense 

deduction not claimed elsewhere . . 12 

13 Employee benefit programs other than 

on line 21 (see Schedule F (Form 1040) 

instructions) . . . . . . . . . 13 

14 Feed . . . . . . . . . . . 14 

15 Fertilizers and lime . . . . . . . 15 

16 Freight and trucking . . . . . . 16 

17 Gasoline, fuel, and oil . . . . . . 17 

18 Insurance (other than health) . . . 18 

19 Interest (see instructions):

a Mortgage (paid to banks, etc.) . . . 19a

b Other . . . . . . . . . . . 19b

20 Labor hired (less employment credits) 

(see Schedule F (Form 1040) 

instructions) . . . . . . . . . 20 

21 Pension and profit-sharing 

plans . . . . . . . . 21 

22 Rent or lease:

a Vehicles, machinery, and 

equipment (see instructions) 22a

b Other (land, animals, etc.) . . 22b

23 Repairs and maintenance . 23 

24 Seeds and plants . . . . 24 

25 Storage and warehousing . 25 

26 Supplies . . . . . . . 26 

27 Taxes . . . . . . . . 27 

28 Utilities . . . . . . . . 28 

29 Veterinary, breeding, and 

medicine . . . . . . . 29 

30 Other expenses (specify):

a 30a

b 30b

c 30c

d 30d

e 30e

f 30f

g 30g

31 Total expenses. Add lines 8 through 30g. See instructions . . . . . . . . . . . . . . 31 

32 Net farm rental income or (loss). Subtract line 31 from line 7. If the result is income, enter it here and 

on Schedule E (Form 1040), line 40. If the result is a loss, you must go to line 34. See instructions . 32 

33 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . 33

34 If line 32 is a loss, check the box that describes your investment in this activity. 

See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 34a All investment is at risk.

34b Some investment is not 

at risk.

c You may have to complete Form 8582 to determine your deductible loss, regardless of which box 

you checked. If you checked box 34b, you must complete Form 6198 before going to Form 8582. In

either case, enter the deductible loss here and on Schedule E (Form 1040), line 40. See instructions. 34c

For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 13117W Form 4835 (2023) 
Form 4835 (2023) Page 2 

General Instructions

Section references are to the Internal Revenue Code 

unless otherwise noted. 

Future developments. For the latest information about 

developments related to Form 4835 and its instructions, 

such as legislation enacted after they were published, go 

to www.irs.gov/Form4835.

Purpose of Form

If you were the landowner (or sub-lessor) and did not 

materially participate (for self-employment tax purposes) 

in the operation or management of the farm, use Form 

4835 to report farm rental income based on crops or 

livestock produced by the tenant. See chapter 12 in Pub. 

225, Farmer’s Tax Guide, for the definition of material 

participation for landlords.

Use this form only if the activity was a rental activity for 

purposes of the passive activity loss limitations. See the 

Instructions for Form 8582, Passive Activity Loss 

Limitations, for the definition of “rental activity.”

If you have net income on line 32, your tax may be less 

if you figure it using Schedule J (Form 1040).

Do not use Form 4835 if you were a/an:

• Tenant—instead use Schedule F (Form 1040) to report 

farm income and expenses;

• Landowner (or sub-lessor) and materially participated in 

the operation or management of the farm—instead use 

Schedule F (Form 1040) to report farm income and 

expenses;

• Landowner (or sub-lessor) and received cash rent for 

pasture or farmland based on a flat charge—instead 

report as income on Schedule E (Form 1040), Part I;

• Estate or trust with rental income and expenses from 

crop and livestock shares—instead report on Schedule E 

(Form 1040), Part I; or

• Partnership or S corporation with rental income and 

expenses from crop and livestock shares—instead report 

on Form 8825.

Qualified joint ventures. If you and your spouse each 

materially participated as the only members of a jointly 

owned and operated farm rental business, and you filed a 

joint return for the tax year, you can make an election to 

be taxed as a qualified joint venture instead of a 

partnership. This election in most cases will not increase 

the total tax owed on the joint return, but it does give 

each of you credit for social security earnings on which 

retirement benefits are based and for Medicare coverage 

without filing a partnership return. 

If you and your spouse make the election and you 

didn’t materially participate (for self-employment tax 

purposes) in the operation or management of the farm, 

but maintained the farm as a rental business, you each 

can file a separate Form 4835 to report your share of farm 

rental income based on crops or livestock produced by 

the tenant. If you and your spouse did materially 

participate (for self-employment tax purposes) in the 

operation or management of the farm, you each must file 

a separate Schedule F (Form 1040). For an explanation of 

“material participation,” see the instructions for Schedule 

C (Form 1040), Profit or Loss From Business (Sole 

Proprietorship), line G. For more information on qualified 

joint ventures, go to www.irs.gov/QJV.

Additional information. See the Instructions for

Schedule F (Form 1040), Profit or Loss From Farming, 

and Pub. 225 for more information.

Specific Instructions

Employer ID number (EIN). You need an EIN only if you 

had a qualified retirement plan or were required to file an 

employment; excise; estate; trust; partnership; or alcohol, 

tobacco, and firearms tax return. If you need an EIN, see 

the Instructions for Form SS-4.

Line A. Generally, you are considered to actively

participate if you participated in making management 

decisions or arranging for others to provide services 

(such as repairs) in a significant and bona fide sense. 

Management decisions that are relevant in this context 

include approving new tenants, deciding on rental terms, 

approving capital or repair expenditures, and other similar 

decisions. You do not, however, actively participate if at 

any time during the year your interest (including your 

spouse’s interest) in the activity was less than 10% (by 

value) of all interests in the activity.

Part I. Gross Farm Rental Income—Based on 

Production

Line 1. Report income you received from livestock, 

produce, grains, and other crops based on production. 

Under both the cash and the accrual methods of 

accounting, you must report livestock or crop share 

rentals received in the year you convert them into money 

or its equivalent.

Lines 2a and 2b. Enter on line 2a your total distributions 

from cooperatives as shown on Form 1099-PATR, 

Taxable Distributions Received From Cooperatives. On 

line 2b, report the taxable amount. See the instructions 

for Schedule F (Form 1040), lines 3a and 3b.

Lines 3a and 3b. Enter on line 3a the total agricultural 

program payments you received. On line 3b, report the 

taxable amount. See the instructions for Schedule F 

(Form 1040), lines 4a and 4b.

Lines 4a through 4c. Report the full amount of

Commodity Credit Corporation (CCC) loans forfeited, 

even if you reported the loan proceeds as income. See 

the instructions for Schedule F (Form 1040), lines 5a 

through 5c.

Lines 5a through 5d. In general, you must report crop 

insurance proceeds in the year you receive them. Federal 

crop disaster payments are treated as crop insurance 

proceeds. However, if you use the cash method of 

accounting and 2023 was the year of damage, you can 

elect to include certain proceeds in income for 2023. To 

do this, check the box on line 5c and attach a statement 

to your return. See chapter 3 of Pub. 225.

Generally, if you elect to defer any eligible crop 

insurance proceeds, you must defer all such crop 

insurance proceeds (including federal crop disaster 

payments).
Form 4835 (2023) Page 3 

For details on how to complete lines 5a through 5d, see 

the instructions for Schedule F (Form 1040), lines 6a 

through 6d.

Line 6. Use this line to report income not shown on lines 

1 through 5d. See the instructions for Schedule F (Form 

1040), line 8.

Part II. Expenses—Farm Rental Property

Capitalizing costs of producing property and 

acquiring property for resale. If you produced real or 

tangible personal property or acquired property for resale, 

certain expenses may have to be included in inventory 

costs or capitalized. These expenses include the direct 

costs of the property and the share of any indirect costs

allocable to that property. For details and exceptions, see 

Capitalizing costs of producing property and acquiring 

property for resale in the Instructions for Schedule F 

(Form 1040).

How to report. Do not reduce your expenses on lines 8 

through 30f by the expenses you must capitalize. Instead, 

enter the total amount capitalized in parentheses on line 

30g. On the line to the left of the line 30g entry space, 

enter “263A.”

Line 10. Expenses you paid or incurred for soil and water 

conservation, prevention of erosion, or endangered 

species recovery can be deducted only if they are 

consistent with a conservation plan approved by the 

Natural Resources Conservation Service of the 

Department of Agriculture or a recovery plan approved 

pursuant to the Endangered Species Act of 1973 for the

area in which your land is located. If no plan exists, your 

expenses must be consistent with a plan of a comparable 

state agency. Your deduction, however, cannot exceed 

25% of your gross income from farming. See the 

instructions for Schedule F (Form 1040), line 12.

Line 12. Enter your depreciation and section 179 expense 

deduction. For details, including whether you must file 

Form 4562, Depreciation and Amortization, see chapter 7 

of Pub. 225 and the Instructions for Form 4562. 

Lines 19a and 19b. Your interest expense could be 

limited. See the Instructions for Form 8990 for more 

information.

The tax treatment of interest expense differs depending 

on its type. For example, home mortgage interest and 

investment interest are treated differently. You must 

allocate (classify) your interest expense so it is deducted 

(or capitalized) on the correct line of your tax return and it 

gets the right tax treatment. These rules could affect how 

much interest you are allowed to deduct on Form 4835. 

See the instructions for Schedule F (Form 1040), lines 21a 

and 21b. 

Line 22a. If you rented or leased vehicles, machinery, or 

equipment, enter on line 22a the business portion of your 

rental cost. But if you leased a vehicle for a term of 30 

days or more, you may have to reduce your deduction by 

an inclusion amount. See Leasing a Car in Pub. 463, 

Travel, Gift, and Car Expenses.

Lines 30a through 30g. Enter expenses not listed on 

another line. See the instructions for Schedule F (Form 

1040), lines 32a through 32f. If you are required to 

capitalize expenses, see How to report under Capitalizing

costs of producing property and acquiring property for 

resale on this page.

Line 31. If you entered capitalized expenses on line 30g, 

your total expenses on line 31 will equal the total of lines 

8 through 30f reduced by the amount on line 30g.

Line 32. If line 31 is more than line 7, don’t enter your 

loss on line 32. If you have a loss, you must apply the 

at-risk rules and the passive activity loss rules. To apply 

these rules, follow the instructions for line 34 and the 

Instructions for Form 8582. After applying these rules, the 

amount of your allowable loss may be smaller than the 

amount figured by subtracting line 31 from line 7.

• If line 7 is more than line 31 and you don’t have prior 

year unallowed passive activity losses from this activity, 

subtract line 31 from line 7. The result is your net farm 

rental income.

• If line 7 is more than line 31 and you have prior year 

unallowed passive activity losses from this activity, don’t 

enter your net farm rental income on line 32 until you have 

figured the amount of prior year unallowed passive 

activity losses you may claim this year. Use Form 8582 to 

figure the amount of prior year unallowed passive activity 

losses you may include on line 32. If there is a net loss 

after applying the prior year unallowed loss against the 

net farm rental income, enter zero on line 32 and enter the 

net loss on line 34c. Indicate that you are including prior 

year passive activity losses by entering “PAL” on the 

dotted line to the left of the entry space for line 32.

Note: You may need to include information from Form 

4835 on Form 8582 even if you have a net profit. For 

more information, see the Instructions for Form 8582.

Line 34. To determine your deductible loss, you may 

need to complete Form 8582 regardless of whether you 

checked box 34a or 34b. However, if you checked box 

34b, you must complete Form 6198, At-Risk Limitations, 

before you complete Form 8582. See the instructions for 

Schedule F (Form 1040), line 36.

Do not complete Form 8582 if either of the following 

applies.

• You meet all of the conditions listed under Exception for 

Certain Rental Real Estate Activities in the Instructions for 

Schedule E (Form 1040). Instead, enter your deductible 

loss on line 34c and on Schedule E (Form 1040), line 40.

• You were a real estate professional (as defined in the 

Instructions for Schedule E (Form 1040)) and you 

materially participated in the operation of this activity 

(under the passive loss rules). See the Instructions for 

Form 8582 for the definition of material participation. Your 

loss is not subject to the passive activity loss limitations. 

Instead, enter your deductible loss on line 34c and on 

Schedule E (Form 1040), line 40. Also include the loss in 

the total for Schedule E (Form 1040), line 43.