Cash rental income is not considered earned income, is not eligible for Social Security credits and is not Social Security taxable. On the other hand, crop share income is earned income unless classified as rental income, is eligible for Social Security credits, and is Social Security taxable. A landlord should consult with a qualified tax professional to determine the best alternative for tax and planning purposes. It is very important that the tenant and landlord establish good rapport and trust. No written lease or any agreement can substitute for either of these.
Good communication is necessary.
Often circumstances change over the farming year and sometimes issues are overlooked. In summary there are many complex issues unique to each landlord and tenant that an oral lease does not cover. A written lease is a prudent business decision and is not an expression of distrust or lack of confidence in either a tenant or landlord. Qualified legal advice is recommended to review all of the landlord's and tenant's particular legal issues and concerns.