Relief for farmers and ranchers impacted by drought conditions

By Brian Ravencraft

The Internal Revenue Service issued guidance in late September providing tax relief for farmers and ranchers in applicable regions forced to sell or exchange livestock because of the recent  drought conditions.

Under the IRS  guidance, farmers and ranchers may have an extended period of time to replace their livestock and defer tax on any gains from the forced sales or exchanges.

Notice 2024-70 provides a list of the applicable areas, by county or other jurisdiction, designated as eligible for federal assistance. The list includes 41 states and other regions for which drought was reported during the 12-month period ending on Aug. 31, 2024. In Ohio, 39 of the 88 counties are listed as applicable drought areas.

The tax relief generally applies to capital gains realized by eligible farmers and ranchers on sales or exchanges 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, are not eligible.… Continue reading