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WJS-Partnership received between the current year (65 percent)
and the following year (35 percent).
Respondent also takes the position, relying on Rev. Rul.
74-145, supra, that a section 451(d) deferral to 2002 of the
$201,919 crop insurance proceeds which WJS-LLP and WJS-
Partnership received in 2001 is not available to petitioners
because, under normal business practice, petitioners would not
have deferred to 2002 more than 50 percent of the income from the
crops.
Respondent acknowledges that Rev. Rul. 74-145, supra, has
relaxed the rule of section 451(d) to make available the section
451(d) deferral of crop insurance proceeds to a farmer who
normally treats as income in the year following crop production
less than all of the income from the sale of crops for a year,
but only where the farmer normally defers to the following year
more than 50 percent of the current year’s crop income.
Petitioners point out that although Rev. Rul. 74-145, supra,
uses the terms “substantial portion” and “50 percent”, those
terms are not found in section 451(d) or in section 1.451-
6(a)(1), Income Tax Regs. Petitioners argue that the 35 percent
of sugar beet income they normally defer should be treated as
substantial and should be sufficient to support the deferral to
2002 of all crop insurance proceeds received in 2001.
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Last modified: March 27, 2008