Schedule F (Form 1040)

Individuals, trusts, partnerships, S corporations, LLCs taxed as partnerships, and sole members of a domestic LLC engaged in the business of farming report farm income on Schedule F (Form 1040). Use this schedule to figure the net profit or loss from regular farming operations.

Table 3-2. Sales Caused by Weather-Related Conditions

basis of assets. You generally report these amounts on Schedule F for the year you receive payment.

Example. In 2024, you bought 20 feeder calves for $20,000 for resale. You sold them in 2025 for $25,000. You report the $25,000 sales price on Schedule F, line 1a, subtract your $20,000 basis on line 1b, and report the resulting $5,000 profit on line 1c.

Form 4797. Sales of livestock held for draft, breeding, sport, or dairy purposes may result in ordinary or capital gains or losses, depending on the circumstances. In either case, you should not report these sales on Schedule F. Instead, report these sales on Form 4797. See Livestock under Ordinary or Capital Gain or Loss in chapter 8. Animals that you don’t hold primarily for sale are considered business assets of your farm. Some sales of timber/forest products are also reported on Form 4797. See Timber in chapter 8for more information.

Sale by agent. If your agent sells your farm products, you have constructive receipt of the income when your agent receives payment and you must include the net proceeds from the sale in gross income for the year the agent receives payment. This applies even if your agent pays you in a later year. For a discussion on constructive receipt of income, see Cash Method under Accounting Methods in chapter 2.

Sales Caused by Weather-Related Conditions

If you sell or exchange more livestock, including poultry, than you normally would in a year because of a drought, flood, or other

TIP

Corporations use Form 1120 to report the income or loss from regular farming operations.

Disaster assistance and emergency

TIP relief for individuals and busi-

nesses. Special tax law provisions may help taxpayers and businesses recover fi- nancially from the impact of a disaster, espe- cially when the federal government declares their location to be a major disaster area. Get the latest tax relief guidance in disaster situa- tions at IRS.gov/uac/Tax-Relief-in-Disaster- Situations and with regards to disaster area los- ses, at IRS.gov/businesses/Small-Businesses- Self-Employed/Disaster-Assistance-and- Emergency-Relief-for-Individuals-and- Businesses.

Sales or exchanges made before an area became eligible for federal assistance qualify if the weather-related condition that caused the sale or exchange also caused the area to be designated as eligible for federal assistance. The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal departments or agencies.

Income from farming reported on Schedule F includes amounts you receive from cultivating, operating, or managing a farm for gain or profit, either as owner or tenant. This includes income from operating a stock, dairy, poultry, fish, fruit, or truck farm and income from operating a plantation, ranch, range, orchard, or grove. It also includes income from the sale of crop shares if you materially participate in producing the crop. See Rents (Including Crop Shares), later.

Income received from operating a nursery, which specializes in growing ornamental plants, is considered to be income from farming.

Income reported on Schedule F doesn’t include gains or losses from sales or other dispositions of the following farm assets.

• Land.

• Depreciable farm equipment.

• Buildings and structures.

• Livestock held for draft, breeding, sport, or dairy purposes.

Gains and losses from most dispositions of farm assets are discussed in chapters 8 and 9. Gains and losses from casualties, thefts, and condemnations are discussed in chapter 11.