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CAUTION

Entertainment expenses related to your trade or business are generally no longer deductible after 2017.

Preproductive period expenses. If you had preproductive period expenses in 2025 that you are capitalizing, enter the total of these expenses in parentheses on line 32f (to indicate a negative amount) and enter “263A” in the space to the left of the total.

For details, see Capitalizing costs of producing property and acquiring property for resale , earlier, and Uniform Capitalization Rules in chapter 6 of Pub. 225.

Excess business loss limitation. Noncorporate taxpayers may be subject to excess business loss limitations. The at-risk limits and the passive activity limits are applied before calculating the amount of any excess business loss. An excess business loss is the amount by which the total deductions attributable to all of your trades or businesses exceed your total gross income and gains attributable to those trades or businesses plus $313,000 (or $626,000 in the case of a joint return). A trade or business includes, but is not limited to, Schedule F (Form 1040) and Schedule C (Form 1040) activities, an activity reported on Form 4835, and other business activities reported on Schedule E (Form 1040).

Business gains and losses reported on Form 4797 and Form 8949 are included in the excess business loss calculation. This includes farming losses from casualty losses or losses by reason of disease or drought. Excess business losses that are disallowed are treated as an NOL carryover to the following tax year. See Form 461 and its instructions for details.

Line 33 If line 32f is a negative amount, subtract it from the total of lines 10 through 32e. Enter the result on line 33.

Nonresident aliens. Enter the net profit or loss on line 34 and on Schedule 1 (Form 1040), line 6. You should also enter this amount on Schedule SE (Form 1040), line 1a, if you are covered under the U.S. social security system due to an international social security agreement currently in effect. See the Instructions for Schedule SE (Form 1040) or SSA.gov/ international/agreements for information on international social security agreements.

Partnerships. Enter the net profit or loss on line 34 and on Form 1065, line 5. The excess business loss rules are applied at the partner level.

Trusts and estates. Enter the net profit or loss on line 34 and on Form 1041, line 6.

Community income. If you and your spouse had community income and are filing separate returns, see the Instructions for Schedule SE (Form 1040) before figuring self-employment tax.

Earned income credit. If you have a net profit on line 34, this amount is earned income and may qualify you for the earned income credit if you meet certain conditions. See the instructions for Form 1040, line 27a, for details.

Conservation Reserve Program (CRP) payments. If you received social security retirement or disability benefits in addition to CRP payments, the CRP payments aren’t subject to self-employment tax. You will deduct these payments from your net farm profit or loss on Schedule SE (Form 1040), line 1b. Don’t make any adjustment on Schedule F (Form 1040).

Line 35 Reserved for future use

9

Line 36

TIP

You don’t need to complete line 36 if line 9 is more than line 33.

At-risk rules. In most cases, if you have a loss from a farming activity and amounts invested in the activity for which you aren’t at risk, you must complete Form 6198 to figure your allowable loss. The at-risk rules generally limit the amount of loss (including loss on the disposition of assets) you can claim to the amount you could actually lose in the activity.

Check box 36b if you have amounts invested in this activity for which you aren’t at risk, such as the following.

• Nonrecourse loans used to finance the activity, to acquire property used in the activity, or to acquire the activity that aren’t secured by your own property (other than property used in the activity). However, there is an exception for certain nonrecourse financing borrowed by you in connection with holding real property.

• Cash, property, or borrowed amounts used in the activity (or contributed to the activity, or used to acquire the activity) that are protected against loss by a guarantee, stop-loss agreement, or other similar arrangement (excluding casualty insurance and insurance against tort liability).

• Amounts borrowed for use in the activity from a person who has an interest in the activity, other than as a creditor, or who is related under section 465(b)(3)(C) to a person (other than you) having such an interest.

But, if you checked the “No” box on line E, the passive activity loss rules may apply. First, complete Form 6198 to figure the amount of your profit or loss for the at-risk activity, which may include amounts reported on other forms and schedules, and the at-risk amount for the activity. Follow the Instructions for Form 6198 to determine how much of your Schedule F (Form 1040) loss to enter on line 34. After you figure the amount of your loss under the at-risk rules, you may need to complete Form 8582 to figure the amount of loss to enter on line 34. See the Instructions for Form 8582 for details.