Press Releases - Congressman Henry Cuellar Announces Tax Relief For Livestock Producers
CONGRESSMAN HENRY CUELLAR ANNOUNCES TAX RELIEF FOR LIVESTOCK PRODUCERS
Washington, DC- Congressman Henry Cuellar announced today that the Internal Revenue Service has granted livestock producers additional time to recognize capital gains when they were forced to sell their animals because of the lingering drought.
"Liquidation of a herd is a financial and emotional drain," Congressman Cuellar said. "The IRS recognizes that rebuilding a herd takes time. This extension is welcome relief."
In a February letter to the House leadership, Congressman Cuellar asked that appropriate declarations be put into place so that the tax burden created by the forced sale of livestock is minimized. When drought conditions result in an area being declared eligible for assistance by the federal government, taxpayers ordinarily have four years to replace without recognizing any capital gain the livestock that they were forced to sell because of the drought.
Due to prolonged drought in parts of the United States, the IRS is providing additional time to replace livestock that was sold as a result of drought. IRS Notice 2006-82 explains how a taxpayer can determine whether additional time is available. For example, the four-year replacement period scheduled to end on December 31, 2006, is extended for one additional year if, for any weekly period included in the 12-month period ending on August 31, 2006, severe, extreme or exceptional drought conditions were reported for any location in the county. The replacement period may be further extended if the drought conditions persist after August 31, 2006.
To assist a taxpayer in determining whether his replacement period has been extended, the IRS will publish in September a list of counties that experienced exceptional, extreme or severe drought for the 12-month period ending on August 31, 2006. The list will be compiled after consultation with the National Drought Mitigation Center. The IRS expects to publish a similar list for succeeding years.
"I will continue to be an independent voice for those ranchers and farmers suffering from this drought," noted Cuellar. "I will fight to ensure that our agricultural producers have the assistance they need to stay in business."
Congressman Henry Cuellar is a member of the House Budget and Agriculture committees in the 109th Congress; accessibility to constituents, education, health care and economic development are his priorities.
http://www.house.gov/list/press/tx28_cuellar/060920.html