Over the past several months, many livestock producers have wanted information concerning the application of the weather-related sales of livestock rules provided by the IRS.
The IRS recently released “Notice 2022-43: Extension of Replacement Period for Livestock Sold on Account of Drought.” It reports that livestock producers in all 77 Oklahoma counties qualify for the four-year extended period for replacing breeding, dairy and draft animals that were sold in excess of normal beginning Sept. 1, 2021, and throughout 2022.
The beginning of the replacement period is the first 12-month drought-free period (Sept. 1 to Aug. 31). Producers electing to replace animals will have until Dec. 31 of the fourth year. More detailed information can be found by searching for IRS Notice 2022-43.
In addition, the secretary of Agriculture’s federal disaster declarations for this year allow the gain from sales of any livestock in excess of normal for 2022 to be reported on livestock producers’ 2024 income tax return. The following map provides proof of the declarations by county from the secretary.
More detailed information can be found by searching for “USDA secretary of Agriculture drought disaster designations” at www.fsa.usda.gov.
In both scenarios, the treatment only applies to the number of animals sold in excess of normal annual sales. — J.C. Hobbs, Oklahoma State University associate Extension specialist
