[Code of Federal Regulations]
[Title 26, Volume 6]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.451-6]

[Page 118-119]
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.451-6  Election to include crop insurance proceeds in gross

income in the taxable year following the taxable year of 
destruction or damage.

    (a) In general. (1) For taxable years ending after December 30, 
1969, a taxpayer reporting gross income on the cash receipts and 
disbursements method of accounting may elect to include insurance 
proceeds received as a result

[[Page 119]]

of the destruction of, or damage to, crops in gross income for the 
taxable year following the taxable year of the destruction or damage, if 
the taxpayer establishes that, under the taxpayer's normal business 
practice, the income from those crops would have been included in gross 
income for any taxable year following the taxable year of the 
destruction or damage. However, if the taxpayer receives the insurance 
proceeds in the taxable year following the taxable year of the 
destruction or damage, the taxpayer shall include the proceeds in gross 
income for the taxable year of receipt without having to make an 
election under section 451(d) and this section. For the purposes of this 
section only, federal payments received as a result of destruction or 
damage to crops caused by drought, flood, or any other natural disaster, 
or the inability to plant crops because of such a natural disaster, 
shall be treated as insurance proceeds received as a result of 
destruction or damage to crops. The preceding sentence shall apply to 
payments that are received by the taxpayer after December 31, 1973.
    (2) In the case of a taxpayer who receives insurance proceeds as a 
result of the destruction of, or damage to, two or more specific crops, 
if such proceeds may, under section 451(d) and this section, be included 
in gross income for the taxable year following the taxable year of such 
destruction or damage, and if such taxpayer makes an election under 
section 451(d) and this section with respect to any portion of such 
proceeds, then such election will be deemed to cover all of such 
proceeds which are attributable to crops representing a single trade or 
business under section 446(d). A separate election must be made with 
respect to insurance proceeds attributable to each crop which represents 
a separate trade or business under section 446(d).
    (b)(1) Time and manner of making election. The election to include 
in gross income insurance proceeds received as a result of destruction 
of, or damage to, the taxpayer's crops in the taxable year following the 
taxable year of such destruction or damage shall be made by means of a 
statement attached to the taxpayer's return (or an amended return) for 
the taxable year of destruction or damage. The statement shall include 
the name and address of the taxpayer (or his duly authorized 
representative), and shall set forth the following information:
    (i) A declaration that the taxpayer is making an election under 
section 451(d) and this section;
    (ii) Identification of the specific crop or crops destroyed or 
damaged;
    (iii) A declaration that under the taxpayer's normal business 
practice the income derived from the crops which were destroyed or 
damaged would have been included in this gross income for a taxable year 
following the taxable year of such destruction or damage;
    (iv) The cause of destruction or damage of crops and the date or 
dates on which such destruction or damage occurred;
    (v) The total amount of payments received from insurance carriers, 
itemized with respect to each specific crop and with respect to the date 
each payment was received;
    (vi) The name(s) of the insurance carrier or carriers from whom 
payments were received.
    (2) Scope of election. Once made, an election under section 451(d) 
is binding for the taxable year for which made unless the district 
director consents to a revocation of such election. Requests for consent 
to revoke an election under section 451(d) shall be made by means of a 
letter to the district director for the district in which the taxpayer 
is required to file his return, setting forth the taxpayer's name, 
address, and identification number, the year for which it is desired to 
revoke the election, and the reasons therefor.

[T.D. 7097, 36 FR 5215, Mar. 18, 1971, as amended by T.D. 7526, 42 FR 
64624, Dec. 27, 1977; T.D. 8429, 57 FR 38595, Aug. 26, 1992]