Drake Tax - 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 Form 1040, line 18, return to data entry. Open screen F, located on the Income tab.

Verify the status of line E, Did NOT materially participate in 2023.

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 worksheet in View/Print 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:

Publication 925
Instructions for Form 8582
Instructions for Schedule F

I have filled out the Schedule F screen in data entry, but I cannot get page 2 of the form to produce in View/Print mode.

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), go to the F screen and check the box Accrual for line C - Accounting method if not cash. Once this box is marked, the Schedule F page 2 will produce in the View/Print 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. Review FS-2018-9 for more information.

Can I check box 36a or 36b on Schedule F?

It depends on the return type in which the Schedule F is being completed.

1040 - Yes, you can check the box for line 36b, Some investment is NOT at risk. on the F screen.
1065 - No. The decision of whether or not an investment is considered "at risk" is made at the individual level, and not at the 1065 or entity level. Therefore, there is no data entry that allows you to check either box 36a or 36b on Schedule F in a 1065 return.