I own a farm that is partly rented. Am I entitled to tax deductions?

All farm taxes are dealt with by the IRS. There are different ways that taxes and deductions are assessed in case of farmland taxes. These are based on the amount of contribution or responsibility the owner of the land has when it comes to operating or running the rented farmland.  

There are various forms that need to be filed to be entitled to tax deductions. These applications are based upon whether or not the owner of the land is ‘materially participating’ in the running and use of the land. Separate forms need to be completed if you are simply receiving the cash benefits of renting out the farmland in part or even fully.

Tax deduction entitlement is based on whichever form applies to you legally. In case of material participation, it will first need to be verified that you fit the criteria. Once that is done, you will be eligible for tax deductions. The rent and the income you earn will be classified as "self-employed income." If, on the other hand, you classify as a "non-material participant" in your partly rented farmland, then the rent will not classify as self employed income. This means that while you will be exempt from all kinds of gross farm income tax penalties, you will, however, qualify for a part of the soil and water conservation cost claims and deductions.

Farm taxes can result in many complex issues for the landowner as well as the tenant so it is best to seek legal help before claiming tax deductions.