Retired Farmer

[ghubbcpa]

Retired individual is no longer farming. Individual did not sale the farm. There is still some remaining depreciation mainly fencing. How do I report this in Schedule F of ProSeries?

[sjrcpa]

You don't.

If not in the business of farming, there are no depreciable assets used in the business of farming.

[Lukepccpa]

So if he retired from farming but didn't sell the farm, what is he doing with the farm?  Is he renting it out or is it just sitting idle?

If he's renting the farm out, just move the depreciation to the Schedule E to offset the rental income.

If the farm is sitting idle and not collecting income, then there is no depreciation to be taken.  

[ghubbcpa]

Since the farm will be idle, I understand that no depreciation will be taken.  How do I report on Schedule F in ProSeries that the individual will no longer be reporting farming income and expenses to the IRS?  With some forms, there is a box that is checked which reports the business (other endeavor) is no longer active or "This is the final" return or reporting. 

[Lukepccpa · Accepted solution]

If you're not reporting any farm income or expenses on the Schedule F, then just don't file a Schedule F with the return.  I would, however, recommend printing off the depreciation schedule for your file before you delete the Schedule F and related forms in case you fire the farm back up again in the future.

[ghubbcpa]

Thank you.

[The_AntiTax_Man]

@ghubbcpa 

If he rented the farm out, move assets to Sch E or Form 4835.  If he died, assets go into his estate, then back out to his beneficiaries with a new step-up in basis.