Tax tips for dealing with a tough year
This year has been tough for many around the country, and Wesley Tucker, field specialist in agribusiness for the University of Missouri Extension, offers some tax mitigation strategies for dealing with disaster-caused changes, reports the Angus Beef Bulletin.
If you have weather-related sales of livestock, there are two code sections that allow for income deferral: I.R.C. 451 (g) and I.R.C. 1033 (e). The 451 (g) deferral is for excess sales due to drought, flood or weather. You can qualify if your principal trade or business is farming, you are a cash-basis taxpayer, you would not have sold the animals under usual circumstances, and your area is eligible for federal assistance.
For this section 451 (g) to apply, the livestock don’t have to be raised or sold in the weather-related disaster area. An example of this is lost grazing area due to drought. However, the taxpayer must show the sale occurred due to the weather-related conditions, Tucker says.
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