Illinois farmers and ranchers in a number of counties may be able to shield themselves from a big tax hit after severe weather forced them to sell off their livestock.
The Internal Revenue Service announced Friday, October 4, that qualified farmers and ranchers whose drought-sale replacement period was scheduled to expire on December 31, now have until the end of their 2020 tax year to replace the livestock, deferring gains taxes from the forced sales.
Farmers in Hancock, Henderson, Mercer, Rock Island and Warren are eligible for federal assistance. Counties that border those – Adams, Fulton, Henry, Knox, McDonough, Schuyler, and Whiteside – are also eligible.
“Because the normal drought-sale replacement period is four years, this extension immediately impacts drought sales that occurred during 2015,” IRS spokesman Michael Devine said. “The replacement periods for some drought sales before 2015 are also affected due to previous drought-related extensions affecting some of these localities.”
Those counties were identified by the National Drought Mitigation Center as eligible for federal assistance.
“Farmers and ranchers have a tough time normally and the weather hasn’t been kind to some of them,” Devine said. “The extensions were given to give them more time and flexibility to recover from their losses.”
There are exceptions. Sales of other poultry, livestock raised for slaughter or held for sporting purposes, are not eligible.
More information can be found at irs.gov
