End of Year 1099-PATR Box 3 Considerations

If the company will be reporting Per-Unit Retain Allocations (1099-PATR Box 3), below are some items that should be discussed with the auditor and suggestions for options on the Domestic Product Report found in Agvance at Grain / Grain Reports / Settlements / Domestic Production Report.

  1. Is reporting done on a fiscal year or calendar year basis?
    • If reporting on the calendar year, use the January-December date range. If reporting on the fiscal year, use the fiscal year as the date range.
  2. Are all patrons eligible or do the patrons need to be filtered?
    • If needing to filter the patrons who will receive an amount, filtering options are available at the Select Customer window.
  3. When is the income reported for the patron?
    • If the answer is when the Patron receives the check, use the option Use Gross Amount of DP and Installments.
    • If the answer is when the Deferral Contract was made, use the option Include Deferred Payment and Installment Sales.
  4. Should Customer advances be included in the calculation?
    • If yes, use the option Include Grain Advance Payments.
  5. Is there a minimum amount to be reported?

Additional Information for Options when using the Agvance Domestic Production Report for 1099-PATR Box 3

  • Select Customers – Select the Customers to be reported for Box 3. Filter the Customers by selecting a list of customers. Many times, it is preferable to only include active Patrons.
  • Select Eligible Ded/Add – If specific Settlement Deductions/Additions are to be included in the calculation of gross purchases, select the Settlement Deductions/Additions. This option would be used if a Customer has a deduction that would normally come off the price being paid, but, to make it easier for the farmer to understand, the company shows it as a deduction on the Settlement (test weight, damage, protein, etc.).
  • Box 3 Grain Purchases – Indicate if a statement is needed for Box 3 or there is a need to post Box 3 amounts to the Customer for 1099 reporting. Enter the date range for which gross purchases should be included.
  • Minimum Amount – Any Customer with gross grain sales below the amount entered here will not be included on the report or for posting Box 3.
  • Include Grain Advance Payments – Optionally select to include Grain Advances in the calculation of gross purchases for the Customer.
  • Use Gross amount of DP and Installments – When a priced Settlement’s Source is a Deferred Payment/Installment Sale and this is checked, it will use the gross amount of the Deferred Payment/Installment Sale in the calculation of gross purchases (Cash Basis option).
  • Include Deferred Payment and Installment Sales – Select to include Deferred Payments, Installment Sales, and Priced Settlements in the calculation of gross purchases (works like Patronage capture).
  • Suppress Deductions/Additions Column – Select this option to not print the Settlement Deduction column.
  • Post Box 3 and/or Box 6 Customer – Choose to update the 1099 amount to be reported for Box 3 and/or Box 6 on the Customer. This will only update Box 3 and Box 6 amounts when these options are checked on the Report screen. When posting occurs, previous Box 3 and/or Box 6 totals will be removed for every Customer, even if only one customer is selected.
  • Print Summary – Select to print a Summary page that will give the grand total for Box 3, Box 6 gross purchases, and Box 6 amounts.