Capital gains relief is provided for farmers and ranchers affected by drought. In guidance, the IRS announced that farmers and ranchers who were forced to sell livestock due to drought may have an additional year to replace the livestock and defer tax on any gains from the forced sales. The relief generally applies to capital gains realized by eligible taxpayers on sales of livestock held for draft, dairy or breeding purposes. Sales of other livestock (raised for slaughter, held for sporting purposes or poultry) aren’t eligible. To qualify, farmers or ranchers must have sold livestock on account of drought conditions in certain areas. For a list, read Notice 2021-55: 


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