You raise the crop, run the corn maze, and rent the barn for weddings. We split Schedule F from Schedule C, expense the equipment, claim soil conservation §175, and look hard at conservation easement §170(h) where it fits.
Schedule F gives you generous farm-specific deductions. Schedule C for the gift shop, hayrides, and weddings is a separate calculation. Mix them on one form and you lose §175, §451(g) weather deferrals, and the §179 farm equipment cap.
Farm income (crops, livestock, custom hire) goes on Sch F. Agritourism income (corn maze admission, you-pick fees, wedding venue, gift shop, hayrides) usually goes on Sch C unless incidental. Separate books, separate forms. We map each revenue stream to the right schedule.
IRC §183; Treas. Reg. §1.61-4; Rev. Rul. 77-110Tractors, combines, balers, trucks, irrigation, drying systems, grain bins, fencing, and single-purpose ag structures qualify for §179 up to $1,160,000 for 2024 plus 60% bonus on overflow. Used equipment is eligible for bonus too. Cash-basis farmers can time purchases against income.
IRC §179(b); §168(k); §168(i)(13) single-purpose agSoil conservation, water conservation, erosion prevention, drainage tile, terracing, restoring soil fertility, and waterway construction normally must be capitalized. §175 lets a farmer deduct up to 25% of gross income from farming in the year incurred. Most non-farm CPAs do not know this election exists.
IRC §175(a), (b); Treas. Reg. §1.175-1A conservation easement granted in perpetuity to a qualified land trust on farmland of conservation value (open space, wildlife habitat, scenic) can produce a federal charitable deduction worth the appraised value of the development rights given up. Highly scrutinized post-IRA, requires Treasury-approved appraiser and Form 8283. We do not push syndicated structures.
IRC §170(h); §170(f)(11); SECURE 2.0 §605 partnership safe harborInsurance proceeds for crop damage and disaster sales of livestock (excess of normal slaughter) can be deferred to the following year if the farmer normally would have sold in that next year. Election made on Schedule F. Drought/flood disaster declarations expand the window.
IRC §451(g); §1033(e) livestock involuntary conversionSchedule J income averaging lets a farmer spread current year's elevated farm income (good crop year, livestock sale, equipment trade) across the previous 3 years. Can drop you out of the top bracket and back into 12-22% territory. Available only to bona-fide Schedule F farmers.
IRC §1301; Schedule J Form 104040-acre farm with pumpkin you-pick + corn maze + barn-wedding venue, single-member LLC, $260K gross 2024 ($170K Sch F crops, $90K Sch C agritourism). We split the schedules properly, elected §175 on $45K of drainage tile and grass waterway, §179-expensed a $60K tractor, and ran income averaging on Sch J.
$19,000 saved§175 alone moved $11K of normally-capitalized conservation work into current-year deduction. §1301 averaging dropped them from 24% to 22% marginal. State savings on top.