HONOLULU (KHON2) — Hawaii farmers and ranchers who were forced to sell livestock due to drought conditions may have an extra year to replace their livestock.
The Internal Revenue Service (IRS) on Monday announced that this applies to farmers and ranchers living in Hawaii, Honolulu, Kalawao, Kauai, and Maui counties.
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Farmers and ranchers may also defer tax on any gains from the forced sales. To qualify for relief, they must have sold livestock on account of drought conditions in applicable regions, which are listed here.
The IRS states that the relief applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes. The sales must be solely due to drought. Other livestock, such as those raised for slaughter or held for sporting purposes, are not eligible sales.
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The one-year extension gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year to replace the sold livestock. Click here for details on how this provision works.