Farm vs. Non-Farm Income: Classification and Reporting

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Course Description

This course covers how to classify and report income for agricultural clients who carry on both farm and non-farm activities, including custom hire, agritourism, value-added ventures, and mixed or part-year operations. Participants will learn to place each income stream on the correct schedule and to determine how the proportion of farm income affects a client’s eligibility for farmer-only tax provisions.

Overview

ATU Course Number: 107

Field of Study: Taxes (Technical) 

Program Level: Basic 

Prerequisites:  None. Who Is a Farmer? and Farm Tax Overview: How the System Works (ATU) are recommended. 

Advance Preparation: None 

Delivery Method: QAS Self-Study/On Demand 

Recommended CPE/CE Credit: 2.0 hours  

Final Exam: 10 questions · 70% pass threshold 

Target Audience: CPAs, Enrolled Agents, tax preparers, and farm financial advisors 

Learning Objectives

By the end of this course, participants will be able to:
1. Classify a farmer’s custom hire income as Schedule F farm income or separate Schedule C business income. 

2. Classify on-farm agritourism and value-added income as farm or non-farm business income. 

3. Determine the correct schedule for each income stream of a mixed-activity client.

4. Determine how classification affects whether a client meets the farmer estimated-tax test (the 66⅔% farm-income threshold).

Course Lessons

Course Outline

Meet Your Instructor

Penny Wade Smith EA

Penny Wade Smith is the second-generation owner of Wade Farm Financial Services of Mayfield Kentucky. She specializes in farm and entity bookkeeping and income taxes, as well as tax, estate, succession and retirement planning for farmers.

For more information on your instructor, please visit our About section.

Education Information

  • ATU Course ID: ATU-TAX-BAS-SS-2026-010-v1
  • IRS Program Number: QKKWZ-T-00008-26-S
  • NASBA Registry ID Number: 170295
  • Field of Study: Taxes (NASBA): Federal Tax Topics/Federal Tax Related Matters (IRS)
  • Delivery Method: QAS Self-Study (NASBA): On-Demand (IRS)
  • Publication Date: July 2026
  • Revision/Review Date: July 2026
  • Course Developer: Penny Wade Smith EA
  • Course Reviewer: Paul G. Neiffer CPA

Participants must complete the Final Exam within one year of purchase.