Tax Relief Available for Livestock Sold Because of Drought
Farmers and ranchers in designated disaster areas who were forced to sell draft animals, breeding livestock or dairy animals early because of drought, flood or other weather-related conditions have been granted more time to defer payment of capital gains taxes on replacement animals. The deferment for purchasing replacement animals is normally four years, but during an extended drought, the Internal Revenue Service can extend the replacement period until after it ends.
Last week the IRS announced the states and counties with a replacement period for livestock that was scheduled to expire at the end of 2012 but has been extended to the first taxable year after the drought ends.
Read IRS Notice 2012-62 for details.