Tax Relief Approved for Drought-Stricken Cattlemen
WASHINGTON - Cattle producers impacted by the nation’s ongoing drought will have additional time to purchase replacement property for livestock they were forced to sell, according to a notice released today by the Internal Revenue Service.
Today’s announcement comes in response to efforts by the National Cattlemen’s Beef Association (NCBA) and letters from key senators to Treasury Secretary Henry Paulson requesting that he extend the tax relief for ranchers who were forced to sell off large portions of their breeding stock as a result of drought conditions during 2002.
“In the past, NCBA worked to support the American Jobs Creation Act which contained a provision to amend Section 1033 (e) of the Uniform Tax Code,” explains Jason Jordan, manager of legislative affairs for NCBA. “This amendment extended the tax deferment period for weather-related sales of livestock – known as involuntary conversions – from two years to four years. The language also gives the Secretary of the Treasury authority to further extend the deferral period.”
Extending the tax deferment period will allow producers to replace breeding animals they were forced to sell at a more feasible time. “Some producers are coming to the end of their four-year replacement period,” says Jordan. “But this announcement means that ranchers still dealing with horrific effects of the drought will not have to restock their herds until one year after the official end of their drought conditions.”
IRS Notice 2006-82 explains how a taxpayer can determine whether additional time is available. In addition, the IRS said it plans to publish a list of counties that experienced exceptional, extreme or severe drought for the 12-month period ending August 31, 2006.
“NCBA is dedicated to common-sense tax law,” says Jordan. “This IRS announcement will provide relief not only for producers who have already been forced to liquidate herds, but also for any producer who is currently faced with selling livestock as a result of drought.”
Member-driven policy of NCBA supports drought and disaster relief for American beef producers when they are hit by unforeseen natural disasters, and NCBA will continue its fight for meaningful drought relief.