farm lease question

hardworkingwoman · #1 08/05/12, 09:30 AM

Hi,

I have a question about leasing our farm. We have a farmer leasing our property at this moment. This is his second year. When he came here and decided that he was going to farm I asked him if he wanted something in writing. He said no. So now he sent our check for this year and last year combined and put a note in the envelope that he needs our SS# for tax purposes! This was not discussed in the agreement. We are in Pennsylvania, is there a law that says we need to give him that info? I tried to find something on line but am not sure what to look for. We leased our farm for 12 years prior to this and they never asked us for this info. Does anyone know anything about this?
Thank you !!

hardworkingwoman · #2 08/05/12, 09:54 AM

Is this the right section for this question?

chickenmommy · #3 08/05/12, 10:12 AM

Is he issuing a 1099 based on the amount of rent he has paid? I would ask him why he wants the information and inform him that if he is planning to issue a 1099 for the amount of rent he has paid (ie: income to you) then his rent will be going up to compensate. If he issues a 1099 then you will have to claim his rent as income and pay taxes on it. If you can show any receipts for improvements to that particular parcel of land, you can claim it against any profits you receive from him, lowering your taxable amount.
I would find out from him why he wants that information and then I would call the IRS and get all the information I need to make sure my own taxes are right. They will talk you through any forms you need to fill out and tell you what forms you need. They will also tell you what deductions you can claim, but you have to ASK the questions, they won't offer up the information.

lurnin2farm · #4 08/05/12, 10:23 AM

I wouldn't give anyone your SS number. To much fraud and to many people asking for the number which desensitizes people to just give up the number whenever asked. Even my water company asked me for it. I made one up.

It clearly states on the info that came with the ss card "Some private organizations use SS numbers for record keeping purposes. Such use is neither required or prohibited by federal law. The use of such a number by an organization for its own records is a private matter between you and the organization."

If he says he needs it to report to the IRS you can let him know it is your responsibility to report your income. You can also let him know that for privacy reasons you prefer to keep your number, well, private. If you didnt have to use it for the last 12 years you probably dont need it now.

luvrulz · #5 08/05/12, 10:58 AM

There is a business relationship between you 2 and he needs to issue you a 1099 so you can file the rental income on your taxes. A requirement if it's >$600 anywhere in the USA....he is obligated by law to do that to protect his assets. Anyone that pays an individual more than $600 in a calendar year [legally] should be issuing a 1099 to that person/business and sending a copy to the IRS.

All that means is that he runs his business on the up and up. You don't know, he might've gotten audited by the IRSand now has to do this....

luvrulz · #6 08/05/12, 11:02 AM

Quote:

Originally Posted by lurnin2farm

I wouldn't give anyone your SS number. To much fraud and to many people asking for the number which desensitizes people to just give up the number whenever asked. Even my water company asked me for it. I made one up.

It clearly states on the info that came with the ss card "Some private organizations use SS numbers for record keeping purposes. Such use is neither required or prohibited by federal law. The use of such a number by an organization for its own records is a private matter between you and the organization."

If he says he needs it to report to the IRS you can let him know it is your responsibility to report your income. You can also let him know that for privacy reasons you prefer to keep your number, well, private. If you didnt have to use it for the last 12 years you probably dont need it now.

Unless you are a tax specialist or trained by H & R Block, you really don't know nothing about the tax laws....you are giving out false info....

luvrulz · #7 08/05/12, 11:04 AM

Quote:

Originally Posted by chickenmommy

Is he issuing a 1099 based on the amount of rent he has paid? I would ask him why he wants the information and inform him that if he is planning to issue a 1099 for the amount of rent he has paid (ie: income to you) then his rent will be going up to compensate. If he issues a 1099 then you will have to claim his rent as income and pay taxes on it. If you can show any receipts for improvements to that particular parcel of land, you can claim it against any profits you receive from him, lowering your taxable amount.
I would find out from him why he wants that information and then I would call the IRS and get all the information I need to make sure my own taxes are right. They will talk you through any forms you need to fill out and tell you what forms you need. They will also tell you what deductions you can claim, but you have to ASK the questions, they won't offer up the information.

And write off as many receipts for *anything* if you need to claim that income on your taxes...... Any improvements you make - any tools you buy; whatever you do that can be considered for that property, use that write off. Very handy having rental income in that way... :-)

mistletoad · #8 08/05/12, 11:16 AM

You are doing business - get a EIN from the IRS and give him that number for the 1099. Make sure you file your schedule E showing the income.

Bearfootfarm · #9 08/05/12, 11:33 AM

Next year, get it all in WRITING. Specify the amounts, the time period it covers, and anything else that matters, such as how he is to leave the fields, and if he will maintain any ditches or paths.

And don't be paranoid.
Just give him the SS# so he can fill out the 1099 the GOVT requires

chickenmommy · #10 08/05/12, 11:56 AM

Quote:

Originally Posted by luvrulz

And write off as many receipts for *anything* if you need to claim that income on your taxes...... Any improvements you make - any tools you buy; whatever you do that can be considered for that property, use that write off. Very handy having rental income in that way... :-)

Wish I could have "liked" this twice!

bruce2288 · #11 08/05/12, 01:03 PM

luvrulz has given you the facts. I send 1099s to two guys I rent pasture from, I need their SS to do that. If you can not trust this man you should not be renting to him. If it is irrational paranoia ?

Molly Mckee · #12 08/05/12, 03:57 PM

You are required to give him you ss number so he can file 1099. It's the law for both of you. If the other guy didn't have your ss number he was doing his taxes correctly, or he was paying very little.

rambler · #13 08/05/12, 11:24 PM

There are portions of the Farm Bill/ Farm Services Agency that require the SS numberof all landlords as well.

Very common deal, farming is the government's business these days.

If the previous farmer didn't need your number, he was doing something wrong.....

--->Paul

Alice In TX/MO · #14 08/06/12, 06:28 AM

Quote:

Originally Posted by luvrulz

There is a business relationship between you 2 and he needs to issue you a 1099 so you can file the rental income on your taxes. A requirement if it's >$600 anywhere in the USA....he is obligated by law to do that to protect his assets. Anyone that pays an individual more than $600 in a calendar year [legally] should be issuing a 1099 to that person/business and sending a copy to the IRS.

All that means is that he runs his business on the up and up. You don't know, he might've gotten audited by the IRSand now has to do this....

THIS IS THE ANSWER. If you do business, yes, you have a legal obligation to give him your info so he can legally report his expenses.

Doing otherwise is tax fraud.

MO_cows · #15 08/06/12, 07:03 AM

There is even a federal form for requesting someone's tax id or SS, I think it is W-9. Go to irs.gov and read up on it. Sounds like a reasonable request, he is doing business by the book.

PaulNKS · #16 08/06/12, 09:09 AM

We rented some winter pasture to a young man last winter. He called me wanting my ss number for his accountant. I told him there was no way in "H" anyone was getting my ss number. I told him that his accountant could still file the 1099 and I would include the income on my taxes.

It worked out fine that way. But NO individual is going to get my ss number for ANY reason... or not from me.

P.S. We've had other renters in the past and their accountants never needed our ss number so... I doubt this one does either.

Alice In TX/MO · #17 08/06/12, 10:20 AM

Bad advice. Again.

New laws, new requirements.

lurnin2farm · #18 08/06/12, 10:51 AM

Quote:

Originally Posted by luvrulz

There is a business relationship between you 2 and he needs to issue you a 1099 so you can file the rental income on your taxes. A requirement if it's >$600 anywhere in the USA....he is obligated by law to do that to protect his assets. Anyone that pays an individual more than $600 in a calendar year [legally] should be issuing a 1099 to that person/business and sending a copy to the IRS.

All that means is that he runs his business on the up and up. You don't know, he might've gotten audited by the IRSand now has to do this....

Shes renting her property to someone. Does every renter have to send a 1099 to the landlord every month because its more than 600?
I see no difference here. She is renting her property out to someone. He going to write off that cost as a rental expense and she will claim the earnings as rental income.

luvrulz · #19 08/06/12, 11:18 AM

Quote:

Originally Posted by lurnin2farm

Shes renting her property to someone. Does every renter have to send a 1099 to the landlord every month because its more than 600?
I see no difference here. She is renting her property out to someone. He going to write off that cost as a rental expense and she will claim the earnings as rental income.

The person receiving the rent has to include that as income. The person paying the rent issues the 1099 - it's an annually kind of thing. And yes, if you do anything and get paid $600 or more, you will receive a 1099M it's called, or you should receive one.

We did a bunch of cookie trays for Christmas and the person that placed the order (total bill $700) issued a 1099M to our bakery. If you have a business/farm and you receive rent from someone; you will need to supply your tax ID # or your social security # for this.

And you can still include the income on your return, however, it's not madatory for the 1099M - just for some businesses. If the IRS sees that a 1099M was issued to you and you didn't intemize the income as rental income or whatever - odds are, they will audit you and cause you all sorts of grief....don't ask me how I know this....

You don't want them to get your number, so to speak either.....they're like a junk yard dog. They don't let go -

Alice In TX/MO · #20 08/06/12, 11:33 AM

I lease my pasture to Buck S. for $800 a year. He reports it on his taxes as a farm expense. If I do NOT report it as income, and the IRS computers pick up on that, then I get audited.

It's always your choice.