Similarly, an individual rendering services is subject to self-employment tax if the activity rises to the level of a trade or business. Most income received pursuant to a production contract is subject to self-employment tax. Federal gas tax credit. Farm owners, operators and tenants on the cash method of accounting can claim a credit against income tax for the federal excise tax paid on gasoline used on the farm or ranch and on diesel fuel, special motor fuels and aviation fuel used on a farm for farming purposes. Fuel expense is also deductible.
Crop insurance proceeds.
Proceeds from insurance, such as from hail or fire coverage on growing crops, are includible in gross income in the year actually or constructively received. In effect, destruction or damage to crops and receipt of insurance proceeds are treated as a sale of the crop. This text was extracted from the publication, MF2423.