Schedule J farmers

[TAXMAN]

To my more experienced farmer guru's. Question concerns base years. TP is a farmer in 2015,2014,2013. In 2012 tp was listed as a dependent on mom and dads return and had no income. Question becomes can TP use Schedule J for 2015 as tp has not filed this return. Tp's income for 2013-2015 is healthy from farming, does not work anywhere else. TP was buying baby calves @ about $100-200 raising them to be stock cows and selling them for $1200 to 1500. Thanks to who all may be able to answer. A pleminary view at 2016 looks like tp may have net of $40k.

[DANRVAN]

Have you looked at the instructions to Schedule J?  I don't think you have to be a farmer in the base years.

[TAXMAN]

I have read and reread them. I tend to agree you don't have to be a farmer in prior years. What I was concerned with is that TP was dependent on one of the base years with no income.

[DANRVAN]

2 hours ago, TAXMAN said:

. What I was concerned with is that TP was dependent on one of the base years with no income.

The instructions say to input the taxable income and tax for the specific base year. So if he  was not required to file in 2012, I would leave that part blank.

Due to the mathematical maze of Schedule J, he might end up with little or no savings since he is not jumping up into a high income tax bracket.

And if he does, I am not aware of anything in the code that says he is not entitled to it. Reg 1.1301-1(b)(1)(iv) clearly states that the taxpayer does not need to be engaged in farming in the base years.

 

[Gail in Virginia]

4 hours ago, TAXMAN said:

I have read and reread them. I tend to agree you don't have to be a farmer in prior years. What I was concerned with is that TP was dependent on one of the base years with no income.

And taxpayer could have been farming and had a loss in one of the base years.  I don't think having income in all base years is required.