Diversification and Taxes Basics

Diversification through value-added and agritourism ventures is a great way to increase profitability on the farm. However, these ventures can add new layers of complications to your taxes. This is because the IRS treats “farming activities” and “non-farming activities” differently. Farmers are required to report income and expenses from non-farming activities separately. This tipsheet will help you make sense of these new layers when diversifying, ensuring that you report your income correctly.