IRS Publication 225 - Farmer's Tax Guide

AAA

DEFINITION of 'IRS Publication 225 - Farmer's Tax Guide'

A document published by the Internal Revenue Service that details how the federal government taxes farms. Whether the farm is owned by the taxpayer or the taxpayer is a tenant, that individual will be liable for taxes if the farm is operated for profit. IRS Publication 225 outlines the different accounting methods that farmers may use for running their operations and how farmers must report farm income.

INVESTOPEDIA EXPLAINS'IRS Publication 225 - Farmer's Tax Guide'

Since farming as a business activity is significantly different from most other businesses, special rules apply. There are special rules for deducting improvement costs, depreciation of machinery and reporting of crop rents.


IRS Publication 225 is related to IRS Publication 51 (Agricultural Employer's Tax Guide).

RELATED TERMS
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  2. Accounting Method

    The method by which income and expenses are reported for taxation ...
  3. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  4. Physical Asset

    An item of economic, commercial or exchange value that has a ...
  5. Accounting Change

    A change in accounting principles, accounting estimates, or the ...
  6. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
Related Articles
  1. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  2. Fundamental Analysis

    Inventory Valuation For Investors: FIFO And LIFO

    We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.
  3. Investing Basics

    Understanding The Cash Conversion Cycle

    Find out how a simple calculation can help you uncover the most efficient companies.
  4. Taxes

    A Concise History Of Changes In U.S. Tax Law

    We look at how U.S. taxes have changed since their inception.
  5. Professionals

    Financial History: The Rise Of Modern Accounting

    Find out how these two have grown hand-in-hand throughout our modern history.
  6. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Sugar

    Discover information about the exchange-traded funds, or ETFs, that offer investors exposure to the basic agricultural commodity, sugar.
  7. Economics

    An America with Donald Trump as President

    Take a closer look at some of policy proposals from Republican presidential candidate Donald Trump, and what a future with President Trump might look like.
  8. Investing

    Who Supports Donald Trump's Campaign?

    Explore the common characteristics among voters who prefer Donald Trump for the 2016 election, including youth, modest incomes and lack of education.
  9. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Agriculture

    Learn about some the best available exchange-traded funds for profiting from exposure to the agricultural sector through stocks and futures.
  10. Investing

    Can Donald Trump Really Win the Presidency?

    Understand why demographic trends and his lack of broad appeal are likely to keep Donald Trump from being a serious contender for the presidency.
RELATED FAQS
  1. How is cost basis calculated on an inherited asset?

    Typically, the cost basis on inherited assets is the fair market value as of the time of the decedent's death or actual transfer ... Read Full Answer >>
  2. How is market value determined in the real estate market?

    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
  3. What are the best free online calculators for calculating my taxable income?

    Free online calculators for determining your taxable income are located at Bankrate.com, TaxACT.com and Moneychimp.com. Determining ... Read Full Answer >>
  4. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
  5. In what instances does overhead qualify for certain tax allowances?

    Businesses are just as keen as anyone else to keep their tax burdens low by any means possible. Overhead expenses often qualify ... Read Full Answer >>
  6. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Nanny Tax

    A federal tax that must be paid by people who hire household help (a babysitter, maid, gardener, etc.) and pay them a total ...
  2. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  3. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  4. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  5. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  6. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!