Tax Deferments on Forced Livestock Sales Extended
Tax Deferments on Forced Livestock Sales Extended
Montana farmers and ranchers who were previously forced to sell livestock because of drought now have more time to replace the livestock and defer paying state and federal income taxes on any gains from those forced sales.
Under federal law, farmers and ranchers can defer any extra gains from these forced sales as long as the livestock is replaced within four years. The Internal Revenue Service is authorized to extend this period if the drought conditions persist and has done so. As a result, farmers and ranchers who were forced to sell livestock in 2008 due to drought now have an additional year to replace the livestock and may defer paying taxes on any gains.
Montana law follows the federal practice regarding these gains so their taxation will be deferred for state income tax purposes as well.
"We want farmers and ranchers to be aware of the tax provisions available to ease the impact on their livestock operations and to help them weather the drought," said Dan Bucks, Director of the Montana Department of Revenue.
The 28 counties in Montana that qualify for this extension are Beaverhead, Big Horn, Broadwater, Carbon, Carter, Cascade, Custer, Fallon, Fergus, Gallatin, Garfield, Golden Valley, Jefferson, Judith Basin, Madison, Meagher, Musselshell, Park, Petroleum, Powder River, Rosebud, Silver Bow, Stillwater, Sweet Grass, Treasure, Wheatland, Wibaux and Yellowstone.
The one-year extension generally applies to the capital gains which eligible farmers and ranchers realized on drought-forced sales of livestock that they held for draft, dairy or breeding purposes. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, and poultry are not eligible.
Other Links:
Federal
Extension of Replacement Period for Livestock Sold on Account of Drought
-Notice 2012-62
Drought-Stricken Farmers and Ranchers Have More Time to Replace Livestock, 43 States Affected
- IR-2012-72, Sept. 25, 2012
Montana
Department of Livestock
Contact Us:
Call our Citizen Services Call Center for assistance with your individual, nonresident, or business tax questions. Our hours of service are Monday through Friday, 8 a.m. to 5 p.m. (Mountain Time)
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Last updated 10/10/2012 1:39:56 PM