Common questions about Schedule F (1040) in Lacerte

Below, you'll find answers to frequently asked questions about Schedule F (1040) in Lacerte.

Table of contents:

How do I enter preproductive expenses for Schedule F/Form 4835?

1. Open Screen 19, Farm Income (Sch. F/4835).
2. If the taxpayer has more than one Schedule F, click the activity in the Schedule list.
3. In the Section list, click Farm Expenses.
4. Press CTRL+E on Other Expenses (Ctrl+E).
5. Enter the description and full amount of preproductive expenses. Include any preproductive period expenses that were capitalized.
6. In Capitalized Preproductive Period Expenses, enter the preproductive period expenses that the taxpayer capitalized.

Back to Table of Contents

How do I override depreciation/amortization for Schedule F/Form 4835?

1. Open Screen 19, Farm Income (Sch. F/4835).
2. In the Schedule list, click the farm or farm rental activity.
3. In the Section list, click Depreciation & Amortization.
4. Enter an amount in Depreciation: Regular Tax [O] to override the calculation of depreciation from Form 4562.
5. Enter an amount in Amortization: Federal [O] to override the calculation of amortization from Form 4562.

Back to Table of Contents

How do I get car and truck expenses to flow to line 10?

You can enter vehicle expenses on the depreciation screen and link them to this Schedule F. 

If you're deducting actual expenses, rather than the standard mileage rate, the depreciation portion is reported on line 14, and lease payments will flow to line 24a.

To verify where expenses are being reported:

1. Click on WKS: Vehicle Expenses.
2. Scroll down to the Vehicle Expense Allocation.

Back to Table of Contents

To force the standard mileage rate or actual expenses:

1. Select the vehicle on Screen 22, Depreciation.
2. Scroll down to the Automobiles and Other Listed Property section.
3. Under Automobile Mileage, enter a 1 or 2 in 1=force actual expenses, 2=force standard mileage rate.

Back to Table of Contents

How does Lacerte calculate depreciation and section 179 expense for line 14?

When you have multiple assets linked to the same Sch F, the fastest way to review their depreciation is on the current year Federal Depreciation Schedule the program produces.

To override current-year depreciation on a single asset:

1. Go to Screen 22, Depreciation.
2. Select the applicable Asset from the left of the screen.
3. Locate the Asset Information section.
4. Scroll down to the Regular Depreciation subsection.
5. Enter the override in Current depreciation/amortization [O].
   • If you overrode the total depreciation on the Schedule F screen, this field won't do anything. Only use on override.

Back to Table of Contents

How do I enter benefit programs for line 15?

1. Go to Screen 19, Farm Income (Sch F, 4835).
2. Scroll down to the Farm Expenses section.
3. Enter the applicable amount in Employee benefit programs.

Back to Table of Contents

How do I enter labor hired for line 22?

1. Go to Screen 19, Farm Income (Sch F, 4835).
2. Scroll down to the Farm Expenses section.
3. Enter the applicable amount in Labor hired.
   • The amount you enter in this field will be reduced by the total amount of employer credits entered on the Schedule F and on Screen 34, General Business & Vehicle Credits. If you want to override the reduction, you can override the employment credits on Screen 19, Farm Income (Sch F, 4835), under Farm Expenses, in the Employment credits (enter as positive) [O] field.

Back to Table of Contents

How do I report lease payments on line 24a?

1. Go to Screen 22, Depreciation.
2. Scroll down to the Automobiles and Other Listed Property section.
3. Locate the Actual Vehicle Expenses subsection.
4. Enter the lease payments in Vehicle rent or lease payments.
   • Make sure that the Vehicle rent or lease payments is greater than the Inclusion amount (enter as positive). If that's already the case, and result still isn't showing on Schedule F, line 24a, the vehicle is most likely taking the standard mileage rate. To report the lease payment expense separately, you must force actual expenses by using the 1=force actual expenses, 2= force standard mileage rate field on Screen 22, Depreciation.

Back to Table of Contents

How do I mark the "All investment at risk" checkbox on Schedule F, line 36?

The program won't check either box under Schedule F, line 36 unless there's a loss on the Schedule F. The text under Schedule F, line 34 says that you shouldn't complete line 36 when there's a profit.

Back to Table of Contents

How does the program calculate self-employment income?

• The program calculates net farm income based on the entries on the Farm Income (Sch. F/4835) and the Passthrough K-1's Screens. You can adjust the total farm income in Farm: Net Income [A] (Screen 45). Enter an increase as a positive number and a decrease as a negative number.
• The program calculates nonfarm income based on the entries on the Miscellaneous Income, Business Income (Sch. C), and Passthrough K-1's screens. You can adjust the total nonfarm income in Nonfarm: Net Income [A] (Screen 45). Enter an increase as a positive number, a decrease as a negative number.
• If income from Schedule C should not be considered self-employment income, select the Not Subject to Self-Employment Tax check box (Screen 16).

Back to Table of Contents

How do I generate Form 4835 instead of Schedule F?

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".

Follow these steps to generate form 4835:

1. Go to Screen 19, Farm Income (Schedule F/Form 4835)
2. In the General Information section, check the box Farm Rental (Form 4835)
3. In the field labeled Type of rental property (Form 4835) (Ctrl + T), choose the correct type.
4. Check the box Did not actively participate (4835 only) if the taxpayer did not actively participate in operating this activity or if the taxpayer's ownership value dropped below 10% during the year.  This entry eliminates the automatic $25,000 real estate exclusion on Form 8582
5. Scroll to the Farm Income section.
6. Enter the income received from the rental
7. Enter expenses in the Farm Expenses section
8. Enter any prior year passive losses in the Prior Year Unallowed Passive Losses section

If the taxpayer incurred a loss on this activity and meets the requirements for filing the form, Form 8582 will generate.

Back to Table of Contents