The client has excess crop income of $35K that is expected to continue for the next four years. Unfortunately, they face taxes and insurance related expenses on this crop income of about $30K each year for a net of just $5K in additional income per year.
By deferring each year’s excess income and taking all four years of additional income as a lump sum payment in year 5, the client expects to net an additional $100K versus just $20K by taking the income now.
