Schedule F - Frequently Asked Questions.
Why isn't the amount on the Schedule F flowing to the 1040?
If the Schedule F is not flowing as expected to line 18 of the 1040, return to data entry. Open screen F, located on the Income tab.
Verify the status of line E, Did NOT materially participate in 20YY.
If you checked this box and you have a loss, you may have to use Form 8582 to figure the allowable loss, if any, flowing to line 34 of Schedule F (Form 1040). You may see the literal PAL next to line 34.
Review the Wks PAL (WK_PAL in Drake15 and prior) worksheet in view mode of the return, as well as the worksheets for Form 8582. In most cases you can deduct the losses from the passive activities only to the extent of income from passive activities.
For more information see
I have filled out the Schedule F screen in data entry, but I cannot get page 2 of the form to produce in the View mode.
The Schedule F page 2 is used exclusively for Farm Income earned under the Accrual method of accounting.
If the accounting method should be Accrual (the farm income is reported when you earn it, not when you receive it), from data entry, go to the Income tab > F Farm/Co-Op Income screen. On this screen is a line C - Accounting method if not cash section where the Accrual method can be indicated. Once this box is marked, the Schedule F page 2 will produce in the View mode.
For definitions of accounting methods, see Publication 538.
Why does my depreciation show 150% DB when I have chosen 200% for my Schedule F assets?
For assets related to a farmer's Schedule F that are placed in service before December 31, 2017, there are certain restrictions on depreciating those assets. All property used in a farming business (except real property) must be depreciated using the Straight Line (SL) or 150% DB methods.
If you choose a method other than Straight Line (SL) or 150% DB method, the software will automatically correct the method per Publication 225.
Note: The Tax Cuts and Jobs Act has modified this rule to allow assets that are placed in service after December 31, 2017 to no longer be required to use the 150 percent declining balance method. However, it is important to note that if the property has a 15 - 20 year life the taxpayer should continue to use the 150 percent declining balance method. Please review FS-2018-9 for more information.
What's new for Drake18?
- Starting in Drake18, the excess farm loss rules no longer apply. However, any loss from this activity that wasn't allowed last year because of the excess farm loss rules is treated as a deduction allocable to this activity in 2018. See Form 461 and its instructions for details on the amount of excess business loss limitation.
- Your business income interest expense deduction may be limited. See Form 8990 and its instructions for details.
- An NOL can no longer be carried back to any tax year, unless the NOL is a farming loss. To the extent the NOL is a farming loss, you can carry back the NOL to each of the 2 tax years preceding the tax year of the loss. For additional information on NOLs for individuals, estates and trusts, and corporations, see Publications 225 and 536.
- More small business taxpayers may be eligible to use the cash method.