The other option that farmers and ranchers need to consider is income averaging. This tool averages the income in 2012 with the incomes from the prior three years. This tool can significantly reduce tax liability for some situations.
Each person's tax situation and goals is distinctive to them. Please visit with your tax accountant to evaluate what options are available to you and then make plans accordingly. This planning is best done prior to year end, giving you the opportunity to execute options that can help you manage tax liability.
For related information, please see the "Tax Consequences to Drought" article from July 2012.
Source: Aaron Berger, Extension Educator, Panhandle Research & Extension Center, University of Nebraska