Business of Farming For purposes of soil and water conservation expenses, you are inthe business of farming if you cultivate, operate, or manage a farmfor profit, either as owner or tenant. You are not farming if youcultivate or operate a farm for recreation or pleasure, rather thanfor profit. You are not farming if you are engaged only in forestry orthe growing of timber. Farm defined.A farm includes stock, dairy, poultry, fish, fruit, and truckfarms. It also includes plantations, ranches, ranges, and orchards. Afish farm is an area where fish and other marine animals are grown orraised and artificially fed, protected, etc. It does not include anarea where they are merely caught or harvested. A plant nursery is afarm for purposes of deducting soil and water conservation expenses. Farm rental.If you own a farm and receive farm rental payments based on farmproduction, either in cash or crop shares, you are in the business offarming. If you receive a fixed rental payment not based on farmproduction, you are in the business of farming only if you materiallyparticipate in operating or managing the farm. See hotel rooms LeipzigLandlordParticipation in Farming in chapter 15. If you get cash rental for a farm you own that is not used in farmproduction, you cannot claim soil and water conservation expenses forthat farm. Example.Hotels pas chers MarbellaYou own a farm in Iowa and live in California. You rent the farmfor $125 in cash per acre and do not materially participate inproducing or managing production of the crops grown on the farm. Youcannot deduct your soil conservation expenses for this farm. You mustcapitalize the expenses and add them to the basis of the land.