Leased Land - non residential

[OkieTaxGal]

Can anyone help me. I have looked on IRS website and not really sure how to find the answer. I am very familiar with residential rental property, but I have a client that just leased 39 acres of just land for cattle use. They leased it out for 3 years, but are receiving the payments as half in one lump sum and then 1 payment per month for 4 months to finish the lease payment. Can you divide the payments up between the 3 years or just put it all on the year they received the payments? And Im sure it goes on a schedule E. I know you can't depreciate land. Just wondering if there is any special tax incentives for land with cattle on it? Thanks for any information that can be given.

Paula

[Pacun]

Can anyone help me. I have looked on IRS website and not really sure how to find the answer. I am very familiar with residential rental property, but I have a client that just leased 39 acres of just land for cattle use. They leased it out for 3 years, but are receiving the payments as half in one lump sum and then 1 payment per month for 4 months to finish the lease payment. Can you divide the payments up between the 3 years or just put it all on the year they received the payments? And Im sure it goes on a schedule E. I know you can't depreciate land. Just wondering if there is any special tax incentives for land with cattle on it? Thanks for any information that can be given.

Paula

Owner of land should report rental income when received. The cattle owner might have to deduct expenses by allocating it in three years.