IRS offers relief to ranchers impacted by drought

Alongside a long list of counties in 41 states and 20 other counties in Wyoming, the Internal Revenue Service (IRS) is offering relief to farmers and ranchers in Crook County who have recently been impacted by drought.

Producers will be given an extended amount of time to replace livestock and defer tax on any gains from forced sales or exchanges.

This extension is offered when a region is listed as under exceptional, extreme or severe drought conditions at any point between September 1, 2023 and the end of August this year, as determined by the National Drought Mitigation Center.

Much of Crook County was listed as within severe drought during August and from mid-February until the beginning of April.

The purpose of this relief is to ensure there is nonrecognition of gain if property is involuntarily converted and replaced with similar property. Sale or exchange of livestock (except poultry) held for draft, breeding or dairy purposes above the number that would be sold under normal circumstances is treated as an involuntary conversion if it is sold or exchanged solely because of drought or other weather-related conditions.

Visit IRS.gov to view the details in Notice 2006-82 and Publication 225, Farmer’s Tax Guide.