Your indemnity payment from crop insurance this year could be substantial, but not all of it is based on yield reduction—which can be deferred—nor on revenue reduction—which has yet to be determined and which cannot be deferred until 2013. It will be up to the farmer (taxpayer) to determine how much of the indemnity check can be deferred and how much cannot be deferred. That calculation is possible, and McEowen works through an example in his fact sheet. However, you will have to plug in your own numbers, including the $5.68 and $13.49 guarantees.
If enough crop insurance policy holders call their insurance company and ask for it, the indemnity check payment could be automatically broken down into how much was due to the yield reduction and how much was due from the revenue guarantee. Farm tax specialists may also be able to develop a quick Internet-based calculator that tax preparers and taxpayers can use. (Hint, hint.)
There is a distinct potential for crop insurance indemnity payments this fall to be based both on yield loss and on policies that pay the harvest price, if it is above the guarantee of $5.68 for corn and $13.49 for soybeans. Since policies pay for both yield and revenue, farmers with those policies will have to separate the production loss from the revenue loss, if they wish to defer a crop insurance payment to 2013, as part of their normal course of business.
Source: FarmGate Blog