As a farmer, you are faced with everything Mother Nature can throw at you. Insects, lack of pollinating insects, hail, wind, cold weather, too much snow, not enough snow, too much rain and not enough rain. And yet they still cultivate!

Where do farmers turn for help?

More recently, the state’s challenge was drought. No rain means no grazing for livestock and no hay for the winter months. So what should a farmer do? You have to sell the herd.

The Internal Revenue Service (IRS) which knows it all, sees it all, and maybe even controls the weather as far as we know, is throwing a rope at Washington farmers in some counties. Farmers and ranchers who have been forced to sell livestock due to the drought may have an additional year to replace livestock and defer tax on gains from forced sales, according to the Internal Revenue Service.

There are restrictions

However, not all toms, cocks or Herfords qualify for the program. The relief generally applies to capital gains realized by qualifying farmers and ranchers on sales of livestock held for milking, dairy or ranching. Sales of other animals, such as those raised for slaughter or kept for sporting purposes, or poultry, are not eligible

The IRS says that to qualify for relief, farmers or ranchers must have sold livestock due to drought conditions in an applicable region. It is a county or other jurisdiction designated as eligible for federal aid as well as contiguous counties. Advisory 2021-55, posted today on IRS.gov, lists applicable regions in 36 states and one U.S. territory.

Who qualifies

For Washington, this applies to the counties of Adams, Asotin, Benton, Chelan, Clark, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Island, Kittitas, Klickitat, Lincoln, Okanogan, Pend Oreille, San Juan, Skagit, Skamania, Spokane, Stevens, Wahkiakum, Walla Walla, Whatcom, Whitman, and Yakima.

More information on reporting drought-related sales and other farm tax issues can be found in publication 225, Farmer’s Tax Guide, available at IRS.gov.