Pitkin County ranchers part of IRS relief
September 28, 2012
ASPEN – Pitkin County farmers and ranchers who were forced to sell livestock because of drought, like the drought currently affecting much of the nation, have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales, the Internal Revenue Service announced Thursday.
Farmers and ranchers who sell more livestock due to drought than they normally would may defer tax on the extra gains from those sales. To qualify, the livestock generally must be replaced within a four-year period. The IRS is authorized to extend this period if the drought continues.
As a result, farmers and ranchers in these areas whose drought-sale-replacement period was scheduled to expire at the end of this tax year, Dec. 31, in most cases will now have until the end of their next tax year. Additional extensions will be granted if severe drought conditions persist.
Details on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer’s Tax Guide, available on the IRS website.