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year). The 1969 Senate committee report explaining the policy
underlying section 451(d) makes it clear that Congress’ intent
was to provide a deferral of insurance proceeds in those
situations where the farmers were not receiving (and therefore,
under their cash method of accounting, were not reporting) any
income from current year crops until the following year when the
crops were sold. S. Rept. 91-552, at 106-107 (1969), 1969-3 C.B.
423, 492; see also H. Conf. Rept. 91-782, at 299 (1969), 1969-3
C.B. 644, 657.
The Senate report provides the following explanation:
General reasons for change.--The requirement of
present law that crop insurance proceeds must be
included in income for the year of receipt in the case
of taxpayers using a cash method of accounting results
in a hardship where it is the normal practice of the
farmer to sell his crop in the year following that in
which it is raised. In this case the farmer normally
would include the proceeds from the sale of the prior
year’s crop in income for the taxable year and would
include the proceeds from the sale of the current
year’s crop in income for the following year when the
crop is sold. If, however, the current year’s crop is
damaged or destroyed, for instance by hail or windstorm
and the farmer receives insurance proceeds to cover the
loss, he must include the insurance proceeds in income
for the current year. Thus, two years income must be
reported in the current year as a result of an
occurrence over which the farmer has no control. [S.
Rept. 91-552, supra at 106-107, 1969-3 C.B. at 492.]
As stated, under normal practice WJS-LLP, WJS-Partnership,
and petitioners did not report “the” income from the current
year’s sugar beet crops in the following year. Rather, WJS-LLP,
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