Announcement

Collapse
No announcement yet.

Farmers Equipment Wind Damage Insurance Proceeds

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Farmers Equipment Wind Damage Insurance Proceeds

    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?
    Last edited by tpnl; 04-11-2014, 10:01 AM. Reason: spelling

    #2
    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.

    Comment


      #3
      I agree with TXEA. Does not go on Schedule F.

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

      Comment

      Working...
      X