IRS Extends Drought Replacement Period for Ranchers
The IRS announced today in Release 2012-72 that they have extended the period for replacing livestock sold due to drought for another year. Normally, if a rancher is forced to sell their breeding, draft or dairy livestock due to drought, any extra sales caused by drought is allowed to be deferred for up to four years.
This release extends this for another year if the rancher’s county was in a drought situation for at least one week during the period September 1, 2011 to August 31, 2012. This primarily gives relief to ranchers who had to sell their livestock in 2008 since their four year period would be ending December 31, 2012. They now have until December 31, 2013 to replace these sales.
In some cases, it may apply to years before 2008 if they were in an extended drought that had lasted until at least 2011.
IRS Notice 2012-62 lists those counties that were in this drought situation.
Paul Neiffer, CPA
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
[…] Paul Neiffer, IRS Extends Drought Replacement Period for Ranchers […]