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Farmers, ranchers affected by drought have more time to replace livestock and defer tax

Tax Commission News Release

BOISE, Idaho — Oct. 20, 2021 — Farmers and ranchers who were forced to sell livestock due to drought may get extra time to replace the livestock and defer Idaho tax on any gains from the forced sales. This deferral follows the guidelines set by the IRS. 

  • The one-year extension gives eligible farmers and ranchers until the end of the tax year after the first drought-free year to replace the sold livestock.  
  • The farmer or rancher must be in an applicable region. An applicable region is a county designated as eligible for federal assistance, as well as counties contiguous to that county.  
  • The county included in the applicable region must be listed as suffering exceptional, extreme, or severe drought conditions by the National Drought Mitigation Center. For Idaho, this includes the counties of Ada, Adams, Bannock, Bear Lake, Benewah, Bingham, Blaine, Boise, Bonner, Bonneville, Boundary, Butte, Camas, Canyon, Caribou, Cassia, Clark, Clearwater, Custer, Elmore, Franklin, Fremont, Gem, Gooding, Idaho, Jefferson, Jerome, Kootenai, Latah, Lemhi, Lewis, Lincoln, Minidoka, Nez Perce, Oneida, Owyhee, Payette, Power, Shoshone, Teton, Twin Falls, Valley, and Washington. Find the complete list of applicable regions in Notice 2021-55 on IRS.gov.  
  • The relief applies to farmers affected by drought that happened between September 1, 2020, and August 31, 2021.  
  • This relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy, or breeding purposes. Sales of other livestock — such as those raised for slaughter or held for sporting purposes — or poultry aren’t eligible.  

Details are in Notice 2006-82 on IRS.gov.

 

Posted 10-20-2021 tax pros news release general

This information is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and this information, current tax law will govern.
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