Income tax considerations for drought related sales in 2013

Asked November 13, 2013, 9:28 PM EST

Is there a deferral of income from the sale of cattle to 2014 because of forced sale due to drought in 2013? There was for 2011 and 2012 but I haven't seen anything for 2013.There is an extension for replacing breeding and dairy livestock.

Brazoria County Texas farm management ag finance

1 Response

On page 9 of IRS Publication 225 "Farmer's Tax Guide" for 2013 Returns it states:
Sales Caused by Weather-Related Conditions

If you sell or exchange more livestock, including poultry, than you normally would in a year because of a drought, flood, or other weather-related condition, you may be able to postpone reporting the gain from the additional animals until the next year. You must meet all the following conditions to qualify.

  • Your principal trade or business is farming.
  • You use the cash method of accounting.
  • You can show that, under your usual business practices, you would not have sold or exchanged the additional animals this year except for the weather-related condition.
  • The weather-related condition caused an area to be designated as eligible for assistance by the federal government.

Sales or exchanges made before an area became eligible for federal assistance qualify if the weather-related condition that caused the sale or exchange also caused the area to be designated as eligible for federal assistance. The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal departments or agencies.

To find out if your county was declared a disaster area for drought by the Secretary of Ag go to