How do I enter a farm loss or restricted farm loss in TurboTax?

Full-time farmers running a business have no limit on the amount of losses they can deduct. If farming isn’t your main source of income, you may only be able to deduct part of your net farm loss for the year. The part of the loss that you can’t deduct is called a restricted farm loss (RFL). 

You can’t deduct any of your net farm loss if your farm wasn’t run as a business. 

Farm losses, including the allowable portion of a farm loss when farming isn’t your main source of income, can be deducted from all your sources of income in the year of the loss. 

An unabsorbed farm loss from a tax year ending after 2005 becomes a non-capital loss that can be deducted against income from:

• A prior year, up to three years back (carryback)
• A later year, up to 20 years forward (carryforward) 

RFLs can also be carried forward or back this way, but for deduction only against farming income.

For more information on farming losses, visit the CRA’s Self-employed Business, Professional, Commission, Farming, and Fishing Income page.

To report a farm loss or restricted farm loss, follow these steps:

1. Answer the initial Personal info and Tax profile interview questions if you haven't already. This unlocks 2024 tax return.
2. From 2024 tax return, under Add to your return, enter self-employment and select Self-Employment.
3. At Your Self-Employment or Business Summary, select Enter New Business.
4. At AgriStability and AgriInvest Participant, answer Yes or No to the question.
   • If you selected Yes, you’ll complete a series of AgriStability and AgriInvest info entry forms where you’ll enter details about your farming business.
   • If you select No, you’ll complete the regular series of info entries with details about your farming business.
     • Note: TurboTax uses this info to calculate your farming loss for income tax purposes.
5. At Your Self-Employment or Business Summary:
   • Review the summary. For a farming loss, there'll be a negative number under Net Income.
   • If you indicate that your loss is a RFL, TurboTax will restrict your current year’s farming loss.
   • Select either Enter New Business or Done With Businesses as applicable.

To report a farm loss or restricted farm loss, follow these steps:

1. Complete the Introduction/Profile steps of your return until the side menu appears.
2. From the side menu, select Income & Expenses, then Business profile.
3. At Business Identification, select Farming, then continue.
4. At AgriStability and AgriInvest Participant, answer Yes or No to the question about participation.
   • If you selected Yes:
     1. Enter your farm details on the screens that follow, including your farming income, expenses, and inventory adjustments (if applicable). Select Continue as you finish each screen.
     2. At AgriStability and AgriInvest summary:
        • Note: For a farming loss, there will be a negative number under Net Income.
        • If you answer Yes to the question: Is your net farming income (loss) a restricted farm loss? TurboTax will restrict your current-year’s farm loss.
        • Select Done With AgriStability and AgriInvest Income.
     3. At Business summary, select Done With Businesses.
   • If you selected No, or if AgriStability and AgriInvest Participant doesn’t appear for you, you’ll complete the regular series of farming business info entries with details about your farming business. Then select Done With Businesses.
     • Note: TurboTax uses this info to calculate your farming loss for income tax purposes.
     • Note: After completing the farming business info screens, at the Business summary screen, for a farming loss, there will be a negative number under Net Income.
5. At T2042 farming summary, if you answer Yes to the question Is your net farming income (loss) a restricted farm loss? TurboTax will restrict your farm loss for the current year.
6. Select Done With Farming Income.