The IRS has granted an additional one-year tax deferral under Internal Revenue Code 1033 to farmers and ranchers on gains realized in the forced sale of livestock in drought regions of 42 states and the District of Columbia.
The deferral allows farmers and ranchers another year to replace the livestock in what are called applicable regions. Those are counties designated as eligible for federal assistance plus adjacent counties.
Farmers and ranchers who qualify must have sold the animals solely because of drought, flooding or other types of severe weather that caused the geographic area to be designated as eligible for federal aid.
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The agency provides the extension to farmers and ranchers who live in the regions that qualify for four-year replacements if any county, parish, city or district included in the region is listed as enduring exceptional, extreme or severe drought conditions by the National Drought Mitigation Center between Sept. 1, 2016 and Aug. 31, 2017.
The mitigation center issues weekly updates on regions where exceptional, extreme or severe drought is reported in the U.S. Drought Monitor maps.
According to the IRS, taxpayers can use that list instead of the U.S. Drought Monitor maps to determine where drought conditions have been reported.