This is one of the coolest exceptions that farmers can make on their taxes -- a way of determining an average tax rate based on three years of income. This provision is designed to give farmers who've had a bumper year a fair tax rate if they have suffered losses in the previous years.
It sounds pretty simple. If you make a lot more one year, you can actually shift some of your income to lower income years. That'll (theoretically) shift you to a lower tax bracket, which of course considerably helps your tax bill. And while it sounds easy, you can probably imagine that it involves some pretty strict requirements -- and it doesn't always mean you get the lower bracket that year. You might find that the rather complicated mathematics results in a more even average over three years but that it doesn't necessarily prevent you from reaching a higher bracket. But for a lot of farmers who are having a great year amid several bad ones, it could help relieve their tax burden quite a bit.