What if I was affected by drought?

Farmers and ranchers who were forced to sell certain livestock because of drought conditions may have more time to replace their livestock and defer tax on any gains from the forced sales.

If you qualify and need to postpone your income, you'll need to attach a statement and mail your return. The IRS requires the following items for the statement:

• State you're postponing gain under section 451(e).
• Evidence of the weather-related conditions that forced the early sale or exchange of the livestock and the date, if known, on which an area was designated as eligible for assistance by the federal government because of weather-related conditions.
• Explain the relationship of the area affected by the weather-related condition to your early sale or exchange of the livestock.
• The number of animals sold in each of the 3 preceding years.
• The number of animals you would have sold in the tax year had you followed your normal business practice in the absence of weather-related conditions.
• The total number of animals sold and the number sold because of weather-related conditions during the tax year.
• A computation of the income to be postponed for each class of livestock.

For more information see the Farmer's Tax Guide .