In recent years, the relatively high rates of participation of farmers in federal farm programs have assured widespread utilization of Commodity Credit Corporation loan programs. CCC loans have, in the case of feed grains, wheat and some other commodities, involved nonrecourse loans as part of the price and income support feature of farm programs. Commodity loans from the Commodity Credit Corporation are nonrecourse loans to the extent the debtor may pay off the loan with a sufficient amount of an eligible commodity having a price support value equal to the outstanding value of the loan. If the loan plus interest is not paid, the commodity may be forfeited to CCC as full payment for the loan. Yet CCC loans are a peculiar kind of nonrecourse loan. If insufficient commodity of acceptable quality is transferred, the debtor is still personally liable for any deficiency.

The Congress, in an effort to provide a measure of flexibility in income tax planning for farmers on the cash method of accounting, provided many years ago for special treatment for CCC loans. It is assumed that CCC loans are to be treated as loans; but if a taxpayer elects, commodity value equal to a CCC loan may be reported as income.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.