The Internal Revenue Service (IRS) has updated revenue protection (RP) crop insurance deferral options, to the benefit of farmers and ranchers. The change comes after years of requests imploring the change. The update is good news for farmers since most have elected to defer the yield portion of RP crop insurance policies these last few years. The new wording IRS has put forth on RP deferral is as follows:
“Proceeds received from revenue insurance policies may be the result of either yield loss due to physical damage or to decline in price from planting to harvest. For these policies, only the amount of the proceeds received as a result of yield loss can be deferred. Proceeds received from weather insurance policies cannot be deferred if the payment is based on rainfall amounts and is not a result of physical damage to a crop.”
Farmers must still meet the normal crop insurance election requirements to defer the yield portion.
Read more on IRS updates on RP crop insurance deferral here.
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