G2R Posted February 16, 2019 Report Posted February 16, 2019 Got a client who's a farmer, and he received $1.5 million in hurricane crop damage insurance proceeds last year. Is the 1.5 million qualified for the QBI deduction or do we have to remove the insurance proceeds from the QBI income total? Quote
Edsel Posted February 16, 2019 Report Posted February 16, 2019 Great question, but I would think since the insurance proceeds should be taxable and reported on Sch F, the income would give rise to the QBI. Other thoughts?? Quote
G2R Posted February 16, 2019 Author Report Posted February 16, 2019 Logically, I'd agree. In theory, the crop insurance proceeds were awarded based on lost revenue. Revenue that would have been QBI qualified, so I don't see why the insurance proceeds wouldn't. But it's such a large number, if it were denied, it'd be a huge change to the return. And no where can I find a publication on this specifically. So if any farmer CPA out there how more insight, I'm all ears. Quote
DANRVAN Posted February 16, 2019 Report Posted February 16, 2019 So instead of reporting $1.5m as income from crops he is reporting as crop insurance income? Then why not? Was the payment for damages to trees or vines instead of the actual crops? Quote
G2R Posted February 16, 2019 Author Report Posted February 16, 2019 6 minutes ago, DANRVAN said: Was the payment for damages to trees or vines instead of the actual crops? Nope, all crops lost during a hurricane. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.