Cattle producers to receive tax relief from the IRS 

On Sept. 22, the Internal Revenue Service announced details on tax relief available to farmers and ranchers in 49 states and the District of Columbia, who sold livestock due to drought conditions. 

The purpose of the relief is to offer financial support for cattle producers and incentivize a rebuild of the cattle herd that has been slow to increase herd numbers. The IRS website provided a list of counties within each covered state that qualify for the tax relief.  

Producers within in the counties identified by the IRS will be able to defer capital gains on livestock sold or exchanged due to drought 

during the one-year period from Sept. 1, 2024, to Aug. 31, 2025. An IRS press release states that eligible farmers and ranchers must prove that drought conditions were the reason for the sale of the cattle and must show their region was in a federal drought designation at the time of the transaction.  

The press release stated the marketed cattle should be replaced within a four-year-period rather than the usual two-year-period. This gives cattle raisers until the end of the first tax year after the first drought-free year after the four-year-period to replace the cattle they were forced to sell. The IRS has also stated it would extent the replacement period if drought conditions continue, leading to financial difficulties for producers. 

For more information on the tax relief offering, visit www.IRS.gov. 

Lacey Vilhauer can be reached at 620-227-1871 or [email protected].

(Photo by Wolfgang Eckert via Pixabay.)