- 21 -
Kennedy v. Commissioner, 89 T.C. 98, 103 (1987). Although it is
generally acknowledged that distortions of income may result from
use of the cash method, Frysinger v. Commissioner, 645 F.2d 523,
527 (5th Cir. 1981), affg. T.C. Memo. 1980-89; Ansley-Sheppard-
Burgess Co. v. Commissioner, supra at 374; Rojas v. Commissioner,
90 T.C. 1090, 1107 (1988), affd. 901 F.2d 810 (9th Cir. 1990);
Kennedy v. Commissioner, supra at 103; Magnon v. Commissioner, 73
T.C. 980, 1004-1005 (1980), such distortions do not prevent the
cash method from clearly reflecting income so long as the method
is consistently applied and no attempt is made to unreasonably
prepay expenses or defer receipt of income, Ansley-Sheppard-
Burgess Co. v. Commissioner, supra at 375; Kennedy v.
Commissioner, supra at 103-104; Magnon v. Commissioner, supra at
1005-1006; Van Raden v. Commissioner, 71 T.C. at 1104. Moreover,
farmers are allowed great flexibility in timing the receipt of
income from harvested crops and may sell them in one year
pursuant to a contract calling for payment in a later year.
Schniers v. Commissioner, 69 T.C. 511, 520 (1977).
A taxpayer, including a farmer, using the cash method of
accounting is ordinarily entitled to report income in the year it
is actually or constructively3 received, secs. 1.61-4(a), 1.451-
1(a), Income Tax Regs., but may not do so where application of
the general rule results in a material distortion of income. See
3 Respondent does not contend that Vineyards was in
constructive receipt of any of the amounts due it from Winery.
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