IRS Updates Farm Gross Income for Machinery Gains, Will FSA Follow Suit

The IRS has updated Publication 225, the Farmer's Tax Guide, to reflect machinery gains reported on Form 4797 as Farm Gross Income.

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For farm estimated tax purposes, gains from trading-in farm equipment were for many years not treated as farm income by the IRS. This was likely due to most trades of farm equipment not being taxable, and thus the IRS assumed that other equipment gains were probably not farm income.