The Internal Revenue Service (IRS) issued guidance granting tax relief to farmers and ranchers who sold livestock due to drought conditions.
According to the notice, producers in 49 states and other drought-stricken regions may defer taxes on capital gains from forced livestock sales, provided the animals were held for draft, dairy or breeding purposes.
Typically, livestock must be replaced within two years, but this extension allows up to four years—and in some cases, beyond—depending on when the drought officially ends. Sales of livestock raised for slaughter or sporting purposes, as well as poultry sales, are not eligible. The relief offers producers more time and flexibility to recover while managing the impacts of the ongoing drought. For more information, visit tinyurl.com/yvnfbbws.
