Farm and Off-Farm Income Reported on Federal Tax Returns: Farm Profits and Losses, Wages and Salaries, Dividends, Interests, Nonfarm Business, Capital Gains

Excerpts from the report: Farming today is mixed with nonfarm pursuits, but little is known about how individual incomes are affected. Farms and farmers are no longer as easily identifiable as they once were. Off- farm income such as wages and that from nonfarm businesses and investments is a major part of the income of people with farm earnings, especially those who own farmland but are not directly engaged in farming. In fact, most individuals with farm income receive some off-farm income, and many receive most of their income from off-farm sources. Individuals often receive income from farming although they neither live on a farm nor participate directly in farm operations. Moreover, some farm operators do not live on farms. For some people, farming is a sideline; for others, a hobby. The specific objective of this study is to determine the amount of income from various sources received by individuals who derive some of their income from farming. The emphasis is on the income of individuals rather than the income of farm firms. A secondary but important objective is to evaluate farm tax returns as a source of data for studies of income from farming.