Deferring Crop Insurance Income

Farm Journal logo

The following information is bonus material from Top Producer. It corresponds with the article "Test Your Grain in the Field” by Linda Smith. You can find the article on page 14 in the October 2009 issue.

Under Treasury Regulation 1.451-6(a)(2) (the purpose of which is to ameliorate the effects of farmers reporting two years of income in one tax year), crop producers who typically don't sell—and claim income—from their crops until the year after production typically can also wait to declare crop insurance indemnity payments.
However, in a recent court case, Nelson v Commissioner [I.R.C. 451], the Eighth Circuit Court of Appeals said that regulation applies to a taxpayer who receives insurance proceeds as a result of the destruction of or damage to two or more crops and whose customary practice is to defer more than 50% of the aggregate income.
University of Wisconsin law professor Philip Harris reports that in this case, the taxpayers usually defer 35% of their sugar beet income and a total of more than 50% of the combined income from all their crops. However, they received payment for only sugar beets. They were not allowed to defer the crop insurance proceeds. –Linda H. Smith

For more information, see  (Publication 225)


Latest News

Winter bale grazing
North Dakota To Consider Voluntary Checkoff

A North Dakota state representative has introduced legislation that would make the state's additional $1 beef checkoff voluntary. It would have no impact on the national Beef Checkoff.

12 min ago
Greg Hanes: What Have You Done for Me Lately?

In this commentary Greg Hanes, CEO of the Cattlemen's Beef Board, discusses the ways that Beef Checkoff dollars have been used in the past few months.

56 min ago
Cattle and hog feeding
Profit Tracker: Steady In The Red

Cattle and hog feeding margins were little changed last week, with both recording modest losses. Beef packers saw improved margins on significant gains in wholesale beef prices.

16 min ago
USMEF Audio: Taiwan Expands Market Access for U.S. Red Meat, but with Some Controversy

On Jan. 1, Taiwan implemented market access changes for imports of U.S. beef and pork. For beef, the 30-month cattle age limit was eliminated. For pork, it established maximum residue limits for ractopamine residues.

12 min ago
PepsiCo, Beyond Meat Partner to Develop New Plant-Based Snacks

PepsiCo Inc and Beyond Meat Inc said on Tuesday they would form a joint venture to develop and sell snacks and beverages made from plant-based protein.

2 hours ago
Data shows home cooking brings families together.
The Pandemic Upped My Cooking Game

New research shows I'm not the only one who upped my cooking game last year. A new study provides insight into which cooking and consumption habits are likely to continue into the new year and beyond. 

1 min ago