Agriculture Tax Information

Gregory J. Cook, EA, CPA+ Accredited Tax Advisor Past President Alabama Society of Enrolled Agents Past President Alabama Association of Accountants

Sales Caused By Weather-Related Condition

If you sell more livestock, including poultry, than you normally would in a year because of a drought, flood, or other weather-related condition, you may be able to choose to postpone reporting the gain from selling the additional animals until the next year.

Eligibility To Postpone Reporting The Gain From Selling The Additional Animals

You must meet all the following conditions to qualify:

• Your principal trade or business is farming

• You use the cash method of accounting

• You can show that, under your usual business practices, you would not have sold the animals this year except for the weather-related condition

• The weather-related condition caused an area to be designated as eligible for assistance by the federal government


Sales Made Before The Area Became Eligible

Sales made before the area became eligible for federal assistance qualify if the weather-related condition that caused the sale also caused the area to be designated as eligible for federal assistance. The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal agencies.

You must file an election statement and the return by the due date of the return, including extensions.