If you don’t mind me asking, how much will you be leasing it for?

I didn't read this to ensure its accuracy but it certainly looks to be from a credible source. https://www.irs.gov/pub/irs-utl/33-Real%20Estate%2...Cliff Notes:Real Estate Professional Qualification • Material participation in each specific rental • Material participation in separate Real Property Trade or business • 50% rule • 750 hours rule • 5% ownership ruleReal Estate Trade or Business Defined IRC Sec. 469(c)(7)(C) Any Real Property: • Development or redevelopment; • Construction or reconstruction; • Acquisition and/or conversion; • Rental Activity that is not a Passive Activity; • Property management; • Brokerage activities.Example 1: Laura owns 5% or more of a real estate sales office • Works full time as a broker • She owns 3 rental properties and: • She finds the tenants; • Approves tenants and leases; • Approves and oversees repairs & improvements • Net rental losses are $31,000 and her modified AGI is $160,000 before the losses • Deduct the full $31,000 in the current tax yearExample 2: John acquires old homes and contracts 3rd parties to renovate and ready for resale.

Tenant’s lease ends 12/31/17.

Is there a lease signed?

Then maybe develop or lease the farmland. 

They are currently on month to month leases, but my intention is to have them sign new leases (6 - 12 months).

The lease includes a clause that allows us to annually increase the monthly rent by the amount of annual increase of property taxes.

Can we just indicate the garage will being used by us in the lease agreement?

You inherit the lease and responsibility unless the contract states otherwise.

Lease says tenant pays 1/3 of the utility bill.