Farmers Equipment Wind Damage Insurance Proceeds

[tpnl]

Farmer received $100,000 plus in insurance proceeds in 2013 for wind damage to equipment and bins. I know crop insurance is taxable (TTB pg 5-25) and reportable on the schedule F.

But this insurance payment was strictly for damage to equipment and bins. TTB Casualty and Theft Losses pg 4-22 gives an example of a business who had equipment loss and states the gain/loss should be reported on F4684.

Reporting the insurance gain on the Form 4684 saves the taxpayer about $6000 on the Federal return.

However, I posed this question to a fellow preparer (CPA) who does a fair amount of farm returns, and his opinion is it goes on the schedule F.

What do you think?

[TXEA]

It does not go on Schedule F. And if the farmer is replacing the damaged equipment, then you may elect to use up to 2 years to avoid the taxable gain. Must be like kind property for the delayed replacement.

It will be reported as a business casualty (gain) on the Form 4684 if not planning to replace.

[Jiggers]

I agree with TXEA. Does not go on Schedule F.

See IRS Pub 225 (Farmers) about casualty loss and replacement and what is required.