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Level 2

I have a client that built poultry house $1.2 m, the bank that financed the construction. would put the draws in a interest earning checking account.. He drew $6000 in interest., but also paid $65000 in interest. 

This should not be considered as investment income and report on schedule B, I think it should be farm income. If reported on schedule B he losses his EIC. any suggestions. 

They IRS is not allowing him to count as income on schedule F.

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2 Comments 2
Level 15

Unless they are farming Money, it seems they made some investment income on the borrowed funds, and that is called "playing the float."

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Level 15

I hear the money crop was a good one last year.  Just plant those pennies, add a little fertilizer, add a little water here and there and then watch your money grow.

As a side note, if the farmer doesn’t want to report the interest as investment income, send the interest to me and I will happily report it that way.

Slava Ukraini!