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Veteran Advisor
Jim Meade / Iowa City
Posts: 2,397
Registered: ‎04-30-2010
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CRP And Self Employment Tax

The courst have changed their mind and decided that an absentee or non-farmer landlord with land in CRP must now pay self employment tax.

 

http://www.calt.iastate.edu/briefs/CALT%20Legal%20Brief%20-%20CRP%20Payments.pdf

 

"The Tax Court’s decision is the first court opinion holding that a non-farmer’s CRP income is subject to self-employment tax simply by virtue of signing a CRP contract.
As a result of the Tax Court’s decision in Morehouse, it is hard to imagine any situation where CRP rental income will not be subject to self-employment tax"

 

The ruling is so bizarre you have to read the discussion to comprehend how off base it is.  It would seem to me that since self-emmployment tax is now a factor in CRP enrollment, some owners may simply rent the land out - put it crops.

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