- 5 -
the partnerships’ income relating thereto and for 2002 a total of
35 percent of the partnerships’ income relating thereto.
The parties have stipulated that the above method and
percentages used by WJS-LLP and by WJS-Partnership for allocating
and reporting income relating to a particular year’s sugar beet
crop between the year of the harvest (65 percent) and the year
following the harvest (35 percent) (regardless of the year in
which the crops are sold and the proceeds and income are
received) are consistent with the partnerships’ above cash method
of accounting and with accounting and tax reporting practices
within the sugar beet industry and are recognized and accepted
generally by respondent. See generally sec. 451(d); sec. 1.451-
6(a)(1), Income Tax Regs.; Rev. Rul. 74-145, 1974-1 C.B. 113.
Each year for Federal income tax purposes WJS-Partnership
(and its individual partners) reports income from the harvest and
sale of its other farm crops not on the basis of when crops are
sold and the proceeds are received, but rather on the basis of
similar formulas that defer a percentage of the sales proceeds
and income until the following year.
Under the various formulas used by WJS-Partnership for
reporting in the current year and deferring until the following
year a portion of crop proceeds and income, WJS-Partnership
typically defers until the following year over 50 percent of
total income relating to all crops grown in the current year.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008