tractor at work on farm

Cook and Co. Enrolled Agents are licensed by the U.S. Treasury Department to represent taxpayers before the Internal Revenue Service (IRS).

Farm Tax Information

You must include in income any crop insurance proceeds you receive as the result of crop damage.

But, you may choose to postpone reporting it until the following year.

Facts and Circumstances

You must include in income any crop insurance proceeds you receive as the result of crop damage.

You generally include them in the year you receive them. Treat as crop insurance proceeds the crop disaster payments you receive from the federal government as the result of destruction or damage to crops, or the inability to plant crops because of drought, flood, or any other natural disaster.
You May Choose To Postpone Reporting Until The Following Year

If you use the cash method of accounting and receive crop insurance proceeds in the same tax year in which the crops are damaged, you can choose to postpone reporting the proceeds as income until the following tax year. You can make this choice if you can show you would have included income from the damaged crops in any tax year following the year the damage occurred.

How To Postpone Reporting Of Crop Insurance Proceeds

To choose to postpone reporting crop insurance proceeds received in the current year, report the amount you received on line 8a of Schedule F, but do not include it as a taxable amount on line 8b. Check the box on line 8c and attach a statement to your tax return. It must include your name and address and contain the following information:
A statement that you are making a choice under IRC section 451(d) and Treasury Regulation section 1.451-6

The specific crop or crops destroyed or damaged

A statement that under your normal business practice you would have included income from the destroyed or damaged crops in gross income for a tax year following the year the crops were destroyed or damaged.
The cause of the destruction or damage and the date or dates it occurred.
The total payments you received from insurance carriers, itemized for each specific crop and the date you received each payment.
The name of each insurance carrier from whom you received payments.
If you have questions about the related party rules, contact your Agent.
Buddy Fricke, EA

Buddy Fricke, EA

Accredited Tax Advisor

Buddy Fricke, EA

Accredited Tax Advisor
Buddy Fricke, EA

Buddy is a graduate of Auburn University. He holds a Bachelor of Science degree in Mathematics.

Direct Phone: (256) 586-4141
Mary L. Penton, EA

Mary L. Penton, EA

Tax Department

Mary L. Penton, EA

Tax Department
Mary L. Penton, EA

Mary is a graduate of the University of Alabama Huntsville. She holds a Bachelor of Science in Accounting.

Direct Phone: (256) 586-4135
Anthony Nash, CPA

Anthony Nash, CPA

Chartered Global Management Accountant

Anthony Nash, CPA

Chartered Global Management Accountant
Anthony Nash, CPA

Anthony is a graduate of the University of Alabama in Tuscaloosa. He holds a Bachelor of Science in Accounting.

Direct Phone: (256) 586-4153
Jonathan R. Neighbors, EA

Jonathan R. Neighbors, EA

Tax Department

Jonathan R. Neighbors, EA

Tax Department
Jonathan R. Neighbors, EA

Jonathan is a 2005 graduate of the University in Tuscaloosa. He received a Bachelor of Science degree in Accounting.

Direct Phone: (256) 586-4157