taxmap/instr/i1040sf-005.htm#TXMP7fd5138d Chapter 11 bankruptcy.

If you were a debtor in a chapter 11 bankruptcy case during 2007, see page 18 in the instructions for Form 1040 and page SE-2 of the instructions for Schedule SE (Form 1040).

taxmap/instr/i1040sf-005.htm#TXMP4934632a Forms 1099 or CCC-1099-G.

If you received Forms 1099 or CCC-1099-G showing amounts paid to you, first determine if the amounts are to be included with farm income. Then, use the following chart to determine where to report the income on Schedule F. Include the Form 1099 or CCC-1099-G amounts in the total amount reported on that line.

Form		Where to report
1099-PATR		Line 5a
1099-A		Line 7b
1099-MISC for crop insurance		Line 8a
1099-G or CCC-1099-G
for disaster payments		Line 8a
for other agricultural mmprogram payments		Line 6a

You may also receive Form 1099-MISC for other types of income. In this case, report it on whichever line best describes the income. For example, if you received a Form 1099-MISC for custom farming work, include this amount on line 9, Custom hire (machine work) income.

taxmap/instr/i1040sf-005.htm#TXMP37894c0f Lines 5a and 5b

If you received distributions from a cooperative in 2007, you should receive a Form 1099-PATR. On line 5a, show your total distributions from cooperatives. This includes patronage dividends, nonpatronage distributions, per-unit retain allocations, and redemptions of nonqualified written notices of allocation and per-unit retain certificates.

Show patronage dividends received in cash and the dollar amount of qualified written notices of allocation. If you received property as patronage dividends, report the fair market value of the property as income. Include cash advances received from a marketing cooperative. If you received per-unit retains in cash, show the amount of cash. If you received qualified per-unit retain certificates, show the stated dollar amount of the certificates.

Do not include as income on line 5b patronage dividends from buying personal or family items, capital assets, or depreciable assets. Enter these amounts on line 5a only. Because you do not report patronage dividends from these items as income, you must subtract the amount of the dividend from the cost or other basis of these items.

taxmap/instr/i1040sf-005.htm#TXMP25292309 Lines 6a and 6b

Enter on line 6a the total of the following amounts.

• Direct payments.
• Counter-cyclical payments.
• Price support payments.
• Market gain from the repayment of a secured Commodity Credit Corporation (CCC) loan for less than the original loan amount.
• Diversion payments.
• Cost-share payments (sight drafts).
• Payments in the form of materials (such as fertilizer or lime) or services (such as grading or building dams).

taxmap/instr/i1040sf-005.htm#TXMP549daa20

These amounts are government payments you received and are usually reported to you on Form 1099-G. You may also receive Form CCC-1099-G from the Department of Agriculture showing the amounts and types of payments made to you.

On line 6b, report only the taxable amount. For example, do not report the market gain shown on Form CCC-1099-G on line 6b if you elected to report CCC loan proceeds as income in the year received (see Lines 7a Through 7c below). No gain results from redemption of the commodity because you previously reported the CCC loan proceeds as income. You are treated as repurchasing the commodity for the amount of the loan repayment. However, if you did not report the CCC loan proceeds under the election, you must report the market gain on line 6b.

taxmap/instr/i1040sf-005.htm#TXMP1b73b1de Lines 7a Through 7c

taxmap/instr/i1040sf-005.htm#TXMP43b32fff Commodity Credit Corporation (CCC) loans.

Generally, you do not report CCC loan proceeds as income. However, if you pledge part or all of your production to secure a CCC loan, you can elect to report the loan proceeds as income in the year you receive them, instead of the year you sell the crop. If you make this election (or made the election in a prior year), report loan proceeds you received in 2007 on line 7a. Attach a statement to your return showing the details of the loan(s).

taxmap/instr/i1040sf-005.htm#TXMP7aba5d23 Forfeited CCC loans.

Include the full amount forfeited on line 7b, even if you reported the loan proceeds as income. This amount may be reported to you on Form 1099-A.

If you did not elect to report the loan proceeds as income, also include the forfeited amount on line 7c.

If you did elect to report the loan proceeds as income, you generally will not have an entry on line 7c. But if the amount forfeited is different from your basis in the commodity, you may have an entry on  
line 7c.

See Pub. 225 for details on the tax consequences of electing to report CCC loan proceeds as income or forfeiting CCC loans.

taxmap/instr/i1040sf-005.htm#TXMP25ffed85 Lines 8a Through 8d

In general, you must report crop insurance proceeds in the year you receive them. Federal crop disaster payments are treated as crop insurance proceeds. However, if 2007 was the year of damage, you can elect to include certain proceeds in income for 2008. To make this election, check the box on line 8c and attach a statement to your return. See Pub. 225 for a description of the proceeds for which an election can be made and for what you must include in your statement.

Generally, if you elect to defer any eligible crop insurance proceeds, you must defer all such crop insurance proceeds (including federal crop disaster payments).

Enter on line 8a the total crop insurance proceeds you received in 2007, even if you elect to include them in income for 2008.

Enter on line 8b the taxable amount of the proceeds you received in 2007. Do not include proceeds you elect to include in income for 2008.

Enter on line 8d the amount, if any, of crop insurance proceeds you received in 2006 and elected to include in income for 2007.

taxmap/instr/i1040sf-005.htm#TXMP4b0e3e5d Line 10

Use this line to report income not shown on lines 1 through 9, such as the following.

• Illegal federal irrigation subsidies. See Pub. 225.
• Bartering income.
• Income from cancellation of debt. Generally, if a debt is canceled or forgiven, you must include the canceled amount in income. If a federal agency, financial institution, or credit union canceled or forgave a debt you owed of $600 or more, it should send you a Form 1099-C, or similar statement, by January 31, 2008, showing the amount of debt canceled in 2007. However, certain solvent farmers can exclude canceled qualified farm indebtedness from income. To find out if you must include any cancellation of debt in income, see Pub. 225.
• State gasoline or fuel tax refunds you received in 2007.
• The amount of credit for federal tax paid on fuels, if you deducted the total cost of the fuel on your 2006 Form 1040.
• The amount of credit for alcohol used as fuel that was claimed on Form 6478.
• The interest part of the credit or refund of the federal telephone excise tax paid for your farming business telephone lines from Form 8913, line 15, column (e).
• The amount of credit or refund of the federal telephone excise tax paid for your farming business telephone lines if you deducted any telephone excise tax. Include the smaller of the amount deducted or the amount from Form 8913, line 15, column (d), except to the extent the deduction did not reduce federal income tax.
• The amount of credit for biodiesel and renewable diesel fuels that was claimed on Form 8864.
• Any recapture of excess depreciation on any listed property, including any section 179 expense deduction, if the business use percentage of that property decreased to 50% or less in 2007. Use Form 4797 to figure the recapture. See the instructions for Schedule C, line 13, on page C-4 for the definition of listed property.
• The inclusion amount on leased listed property (other than vehicles) when the business use percentage drops to 50% or less. See Pub. 946 to figure the amount.
• Any recapture of the deduction for clean-fuel vehicles and clean-fuel vehicle refueling property used in your farming business. For details on how to figure recapture, see Regulations section 1.179A-1.12/31/08 should be the end of the recapture period — Reg. 1.179A-1(b)(1)( i )
• The gain or loss on the sale of commodity futures contracts if the contracts were made to protect you from price changes. These are a form of business insurance and are considered hedges. If you had a loss in a closed futures contract, enclose the amount of the loss in parentheses.

For property acquired and hedging positions established, you must clearly identify on your books and records both the hedging transaction and the item(s) or aggregate risk that is being hedged.

Purchase or sales contracts are not true hedges if they offset losses that already occurred. If you bought or sold commodity futures with the hope of making a profit due to favorable price changes, report the profit or loss on Form 6781 instead of this line.

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