A loss for cash basis farmers on taxing crop insurance proceeds: The proceeds are taxed up front unless more than 50% of the income from the destroyed or damaged crop would be reported the following year, the Tax Court says. In this case, the farmers typically reported only 35% of the income from their sugar beets the next year. So, all the insurance for their destroyed beets is taxed when received (Nelson, 130 TC No. 5).
It appears that now we are going to have to be able to prove that we would not have sold the damaged crop until the following year.
It appears that now we are going to have to be able to prove that we would not have sold the damaged crop until the following year.
