If drought forced you to switch gears last year, remember that Uncle Sam may offer you a tax break.
“Reporting income from the sale of livestock inventory may be delayed,” says Jose Pena, a Texas Agri-Life Extension Service economist. “If you sell or exchange more livestock than you normally would in a year because of drought, flood or other weather-related conditions, you may be able to postpone reporting the gain until the next year.”
According to Pena, the drought-related break on replacing livestock extends over two years; up to four years if the area in question has been declared a disaster area. The tax deferment for livestock sales allows a one-year postponement.
For more info, go to: www.irs.gov/pub/irs-pdf/p225.pdf or www.irs.gov/irb/2008-42_IRB/ar10.html.