Farm return - Form CCC-1099-G

[LeAnn]

Client was a farmer until March 2007 when his health forced him to sell eveything at an auction and quit farming. This was all reported on the 2007 return. In 2008 client receives Form CCC - 1099-G from US Department of Agriculture for 2005-2007 Crop Disaster Assistance. Is this reported on Schedule F subject to SE tax or do I put it on line 21 as other income since he is disabled and no longer farming. (He is on the organ transplant list awaiting heart and lung transplant due to Agent Orange). I'm hoping that someone has encountered this situation before and can advise me as to what needs to be done. If this is reported on Sch F will the SE tax have any effect (decrease) his current Social Security benefits? Client is 62. Wife is 67. This is the only other income that had in 2008 besides the Social Security therefore they would be under the filing requirements if reported on Line 21. Just need some guidance. Thanks in advance for responses.

LeAnn

[kcjenkins]

It is farming income, and it would be subject to SE. but unless it is a very large amount it should have no effect on his SS income.

[LeAnn]

It is farming income, and it would be subject to SE. but unless it is a very large amount it should have no effect on his SS income.

Thanks KC. It is for $12450. If the client receives anything from the SS office I'll have them to contact me and I'll explain.

LeAnn