Farmers in several Arizona counties will see a difference at tax time. That’s because the IRS has granted some temporary tax breaks to farmers and ranchers affected by the weather.
During the recent period of extreme weather issues including drought and, on the opposite side, flooding, many farmers and ranchers had to take extra measures in order to stay in business. This included selling their livestock.
Farmers and ranchers who are in this position have had their drought-sale replacement period extended. It was to expire on December 31, 2019 but will now run through the end of 2020.
The drought-sale replacement period enables farmers and ranchers to replace the livestock they sold and defer the taxes from any gains due to that sale.
The extension was granted to ranchers and farmers in Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa Cruz, Yavapai, and Yuma counties. Farms in adjacent counties will also be eligible for help regarding weather related sales they may have incurred.
“The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes," the IRS said in a news release. "Sales of other livestock, such as those raised for slaughter or held for sporting purposes, or poultry, are not eligible.”