Form 4835: Farm Rental Income for Landowners

Form 4835 is titled Farm Rental Income and Expenses. You use it when you own farmland, rent it out, and receive part of the crop or livestock instead of cash. The 2025 form is the one for tax year 2025. IRS: Form 4835 (2025)

Use it only in the right case

Use Form 4835 if you were the landowner, or sub-lessor, and you did not materially participate in running the farm for self-employment tax purposes. The form's instructions list other cases that use other forms:

A tenant farms the land. Use Schedule F (Form 1040).
A landowner materially participated in running the farm. Use Schedule F.
A landowner received cash rent based on a flat charge for pasture or farmland. Report it on Schedule E, Part I.
An estate or trust has crop and livestock shares. Report it on Schedule E, Part I.
A partnership or S corporation has these rentals. Use Form 8825.

The instructions also say that Form 4835 is only for a rental activity under the passive activity loss rules. IRS: Form 4835 (2025), Purpose of Form

What Line A asks

Line A asks whether you actively participated in running the farm during the year. You generally actively participate if you made management decisions, such as approving new tenants or repair spending, or you arranged for others to provide services. You do not actively participate if your interest, including your spouse's, was less than 10% of the value of all interests in the activity at any time during the year. IRS: Form 4835 (2025), Line A

Part I: income based on production

Part I reports income based on what the land produces. The main lines are:

Line 1: income from livestock, produce, grains, and other crops.
Lines 2a and 2b: cooperative distributions shown on Form 1099-PATR.
Lines 3a and 3b: agricultural program payments.
Lines 4a to 4c: Commodity Credit Corporation loans.
Lines 5a to 5d: crop insurance proceeds and federal crop disaster payments.
Line 6: other income, including certain fuel tax credits.
Line 7: the total. It goes to Schedule E (Form 1040), line 42.

For crop and livestock shares, report the income in the year you turn the share into cash or its equivalent. That rule applies under both the cash and accrual methods. IRS: Form 4835 (2025), Part I

Crop insurance and deferral

In general, you report crop insurance proceeds in the year you receive them. If you use the cash method, you may be able to postpone eligible proceeds until the year after the damage occurred. To do that, check the box on line 5c and attach a statement to your return. Check the instructions and Publication 225 before you use this choice. IRS: Form 4835 (2025), Lines 5a through 5d

Part II: expenses and the result

Part II lists farm rental expenses on lines 8 through 30. Line 31 is the total. Line 32 is the net farm rental income or loss. A net income goes to Schedule E (Form 1040), line 40. A loss means you must answer the investment-at-risk question on line 34. If you checked box 34b, complete Form 6198 before you go to Form 8582. The deductible loss goes to Schedule E, line 40. IRS: Form 4835 (2025), Part II and Line 34

Records to keep

Keep the settlement statements from the grain or livestock sales, records of the share you received, and the dates you converted it to cash. Keep receipts for expenses on lines 8 through 30. These records support every line you report.

Read Schedule F basics if you farm the land yourself. Read passive activity loss basics if the rental shows a loss. Read rental income and Schedule E basics for other rental income.

General information, not advice for your situation.

Sources: Sources: IRS, Form 4835 (2025), Farm Rental Income and Expenses (https://www.irs.gov/pub/irs-pdf/f4835.pdf); IRS, Form 4835 instructions text printed on the form (2025), Purpose of Form and Specific Instructions This is general information, not advice about your specific return.

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