Weather-related conditions, such as the drought last summer, can result in higher than normal taxable income in the year of adverse weather and lower than normal income the year after. This article discusses how income tax law can be used to even out income across years when faced with the unexpected sale of livestock due to drought or other related adverse weather conditions.
Cash-basis farmers must generally report payments received as income in the year the payment is received. If a producer receives crop insurance indemnities in the year of production, this can cause a bunching of income and make tax planning difficult. This article discusses tax planning considerations and strategies related to crop insurance indemnities.
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