The IRS is providing tax relief for farmers and ranchers in certain areas who were forced to sell livestock because of drought conditions.
Producers may have an extended time to replace their livestock and defer tax on any gains from the forced sales. The IRS has a list of 41 states where drought was reported between Sept. 1, 2023, and Aug. 31, 2024, and producers could be eligible for assistance.
Livestock sales must be solely due to drought, and livestock generally must be replaced within a four-year period instead of the usual two-year period. If drought continues, the IRS may extend the replacement period.
“Eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire at the end of 2024 will have until the end of their next tax year to replace the sold or exchanged livestock,” the IRS said. To view the list of eligible counties, visit tinyurl.com/45fahpkk.
