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If you received a Form 1099-PATR Taxable Distributions Received From Cooperatives, the following is the information you will need to help you determine if the amount needs to be entered on your return. If the purchases you made from the cooperative were only for personal items, please note the instructions from the following IRS Publication 225.

Per IRS Instructions for Form 1099-PATR (for the issuer), on page 4:

Instructions for Recipient

Distributions you received from a cooperative may be includible in your income. Generally, if you are an individual, report any amounts shown in boxes 1, 2, 3, and 5 as ordinary income, unless nontaxable, on your income tax return. You must report any redemptions in boxes 2 and 5 as ordinary income to the extent of the stated dollar value because they were not taxable when issued to you. Amounts shown in boxes 7, 8, and 9 are information needed to compute your section 199A(a) deduction. See the Instructions for Form 8995 or 8995-A for more information. Recipient’s taxpayer identification number (TIN). For your protection, this form may show only the last four digits of your TIN. However, the issuer has reported your complete TIN to the IRS.

Per IRS Publication 225 Farmer's Tax Guide, on page 14:

Personal purchases. Because you can't deduct the cost of personal, living, or family items, such as supplies, equipment, or services not related to the production of farm income, you can omit from the taxable amount of patronage dividends on Schedule F any dividends from buying those items (and you must reduce the cost or other basis of those items by the amount of the dividends). This rule also applies to amounts you receive from the sale, redemption, or other disposition of a nonqualified written notice of allocation resulting from these purchases.

To enter the data on Schedule C (Form 1040) Profit or Loss From Business or Schedule F (Form 1040) Profit or Loss From Farming in the TaxAct program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income in the Federal Quick Q&A Topics menu to expand, then click either Business income or loss from a sole proprietorship or Farming income or loss.
  3. Click + Add Schedule C or + Add Schedule F to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.

If entering the information from Form 1099-PATR on the Schedule F: Enter the amounts on the screen titled Farm Income - Cooperative Distributions. As you will see, there are two fields for Total received and Taxable amount. You can determine the taxable amount by subtracting the dividends from purchasing personal items from the total received (as mentioned in the previous excerpt from Pub. 225).

If entering the information from Form 1099-PATR on the Schedule C: Enter the amounts on the screen titled Business Income - Other Income which will transfer to Schedule C, Line 6. If you purchased personal items as mentioned in the previous excerpt from Pub. 225, subtract the dividends from purchasing personal items and only enter the NET amount in the Other income field.

To enter the data on Form 4835 for farm rental in the TaxAct program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Rent or Royalty Income in the Federal Quick Q&A Topics menu to expand, then click Farm rental for crop shares.
  3. Click + Add Form 4835 to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information. Co-op distributions are entered on the screen titled Farm Rental - Cooperative Distributions.

If there is Federal and/or State income tax withheld on the Form 1099-PATR, those amounts would be entered in the Form 1099-MISC section:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Form 1099-MISC, click + Add Form 1099-MISC to create a new copy of the form, then continue until you reach the screen titled 1099-MISC: Enter information on form.
  3. Click the Switch to Form Entry (optional) link near the top to open the Quick Entry window, enter all of the applicable information from your Form 1099-MISC (including Box 4 or 15), then click Save & Close.
  4. Select the appropriate option to assign the Form 1099-MISC you are currently completing from the Assigned schedule or form drop-down, then click Continue.

Note. If you had selected an "Other Income" option, then on the screen titled What type of income was reported on this Form 1099-MISC?, click the appropriate button. If you click Other non-business income, then check I confirm that the income reported on this Form 1099-MISC is non-business income and is not subject to self-employment taxes to confirm that the income is non-business income and is not subject to self-employment taxes.

Additional Information

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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