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 may 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 for the tax year here. Attach a statement to your return showing the details of the loan(s).
Forfeited CCC Loans
Include the full amount forfeited, even if you reported the loan proceeds as income.
If you did not elect to report the loan proceeds as income, also include the forfeited amount.
If you did elect to report the loan proceeds as income, you generally will not have an entry under Taxable amount of CCC. But if the amount forfeited is different from your basis in the commodity, you may have an entry here (box 3).
See Pub. 225 for details on the tax consequences of electing to report CCC loan proceeds as income or forfeiting CCC loans.
For additional instruction see http://www.irs.gov/pub/irs-pdf/i1040sf.pdf