Arkansas ranchers who sold livestock in 2012 due to the drought may get a little extra time from the Internal Revenue Service to report income from sales.
There were many ranchers who did sell last year. A study of the drought’s effects on the state’s beef cattle industry done by the University of Arkansas found that 49 percent had sold more mature cows than in a typical year and 41 percent sold more heifers.
“These early sales may have been caused by shortage of water, poor grazing conditions, low feed production, or other consequences of weather-related conditions,” said Nathan Kemper, trade adjustment assistance coordinator for the Southern Risk Management Education Center.
Kemper said there are options available to livestock producers and the producers must meet all of the following conditions to qualify:
The first tax option enables ranchers to postpone reporting taxable gain on additional sales of any livestock for a year. Option two enables ranchers to postpone and avoid taxes on gains from the sale of breeding, draft or dairy animals if they are replaced within a specific time frame.
Kemper strongly advised that ranchers contact their CPA or tax specialist on their options and should refer to the IRS Farmers’ Tax Guide for 2012 returns. See here.
Other resources include: