Who is a Farmer?

Course Description

This course explains how the IRS defines a “farmer” for federal tax purposes and how that definition affects tax reporting and eligibility for special tax provisions. Participants will learn to distinguish farming activities from hobby activities, rental arrangements, and agribusiness operations.

The course addresses hobby loss rules, material participation standards, crop-share versus cash-rent arrangements, and proper reporting of farm and non-farm income. Participants will also be introduced to select deductions, exclusions, and deferral provisions available only to qualifying farmers. 

Overview

  • ATU Course #: 101
  • Field of Study: Taxes (Technical) 
  • Program Level: Basic 
  • Prerequisites:  None
  • 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, and tax preparers serving agricultural clients 

Learning Objectives

By the end of this course, participants will be able to:

1. Identify activities that qualify as farming for federal tax purposes.

2. Differentiate between farmers, hobby farmers, landlords, and agribusinesses for tax classification.

3. Apply the hobby loss rules to determine whether a farming activity is engaged in for profit.

4. Determine the proper tax treatment and reporting of farm rental and crop-share income.

5. Recognize special tax provisions available to qualifying farmers. 

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-2026-001-v1
  • IRS Program Number: QKKWZ-T-00002-26-0
  • 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.