You are here: Home > Taxation > Current Issues > Federal Taxation

Counties Eligible for Extended Replacement Period for Livestock Sold Due to Drought

- by Roger McEowen

September 22, 2009

As it does by the end of September every year, the IRS has issued a Notice announcing the extension of the replacement period for livestock that farmers must sell because of severe weather conditions, and has published a list of affected counties.  The Notice points out the change in the law concerning the involuntary conversion of livestock that was made a few years ago.  Under that change, the usual four-year the usual four-year replacement period was extended to the end of a livestock producer's first tax year after the first drought-free year for a particular region. The purpose of the change was to give livestock producers in areas that have sustained long periods of drought additional time to find replacement property and be eligible for deferral of gain. 

I.R.C. Sec. 1033 allows nonrecognition of gain for involuntarily converted that is  property is replaced with property that is similar or related in service or use.  A farmer that sells an excess number (more than is typically sold in the normal course of business) of livestock (other than poultry) that have been held for draft, breeding, or dairy purposes can treat the excess sold as an involuntary conversion if the livestock are sold or exchanged solely on account of drought, flood, or other weather-related conditions.  But, the livestock must be replaced with "like-kind" livestock.  Normally, the replacement period is four years from the close of the first tax year in which any part of the gain from the conversion is realized.  But, a few years ago, the Treasury Secretary was given the discretion to extend the replacement period for taxpayers impacted by prolonged drought.  In those areas, the replacement period is extended until the end of the taxpayer's first tax year ending after the first drought-free year.  So, if an area is designated as not having a drought-free year, the extended replacement period applies.  One way to determine if a taxpayer is in an area that has experienced exceptional, extreme or sever drought is to refer to the U.S. Drought Monitor maps that are produced on a weekly basis by the National Drought Mitigation Center.  Those maps can be found at www.drought.unl.edu/dm/archive.html.

Another way is to wait for the IRS to publish its list of counties, which they do by the end of September each year.  That's what they have now done for the year ending August 31, 2009, in Notice 2009-81.  Here's a list of the counties for which the 12-month period ending August 31, 2009 is not a drought-free year:

 Alabama
 
Counties of Calhoun, Chambers, Cherokee, Cleburne, DeKalb, Jackson, Lee, Madison, Randolph, Russell.
 
California
 
Counties of Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake, Lassen, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Modoc, Mono, Monterey, Napa, Nevada, Orange, Placer, Plumas, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, Yuba.
 
Colorado
 
Counties of Baca, Bent, Las Animas, Prowers.
 
Florida
 
Counties of Alachua, Brevard, Broward, Charlotte, Citrus, Collier, DeSoto, Flagler, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lake, Lee, Levy, Manatee, Marion, Martin, Miami-Dade, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, St. Johns, St. Lucie, Sarasota, Seminole, Sumter, Volusia.
 
Georgia
 
Counties of Appling, Baldwin, Banks, Barrow, Bartow, Ben Hill, Bibb, Bleckley, Bulloch, Burke, Butts, Candler, Carroll, Catoosa, Chattahoochee, Chattooga, Cherokee, Clarke, Clayton, Cobb, Coffee, Columbia, Coweta, Crawford, Crisp, Dade, Dawson, DeKalb, Dodge, Dooly, Douglas, Elbert, Emanuel, Fannin, Fayette, Floyd, Forsyth, Franklin, Fulton, Gilmer, Glascock, Gordon, Greene, Gwinnett, Habersham, Hall, Hancock, Haralson, Harris, Hart, Heard, Henry, Houston, Irwin, Jackson, Jasper, Jeff Davis, Jefferson, Jenkins, Johnson, Jones, Lamar, Laurens, Lincoln, Lumpkin, McDuffie, Macon, Madison, Marion, Meriwether, Monroe, Montgomery, Morgan, Murray, Muscogee, Newton, Oconee, Oglethorpe, Paulding, Peach, Pickens, Pike, Polk, Pulaski, Putnam, Rabun, Richmond, Rockdale, Schley, Screven, Spalding, Stephens, Stewart, Sumter, Talbot, Taliaferro, Tattnall, Taylor, Telfair, Toombs, Towns, Treutlen, Troup, Twiggs, Union, Upson, Walker, Walton, Warren, Washington, Webster, Wheeler, White, Whitfield, Wilcox, Wilkes, Wilkinson.
 
Hawaii
 
Counties of Hawaii, Honolulu, Kauai, Maui.
 
Kansas
 
Counties of Barber, Clark, Comanche, Hamilton, Meade, Morton, Seward, Stanton, Stevens.
 
Kentucky
 
Counties of Adair, Allen, Anderson, Barren, Bath, Bell, Bourbon, Boyle, Breathitt, Butler, Calloway, Carter, Casey, Christian, Clark, Clay, Clinton, Cumberland, Edmonson, Elliott, Estill, Fayette, Fleming, Floyd, Franklin, Garrard, Grayson, Green, Hardin, Harlan, Harrison, Hart, Jackson, Jessamine, Johnson, Knott, Knox, Larue, Laurel, Lawrence, Lee, Leslie, Letcher, Lincoln, Logan, McCreary, Madison, Magoffin, Marion, Martin, Menifee, Mercer, Metcalfe, Monroe, Montgomery, Morgan, Muhlenberg, Nelson, Nicholas, Owsley, Perry, Pike, Powell, Pulaski, Rockcastle, Rowan, Russell, Scott, Shelby, Simpson, Spencer, Taylor, Todd, Trigg, Warren, Washington, Wayne, Whitley, Wolfe, Woodford.
 
Louisiana
 
Parishes of Assumption, Lafourche, St. Martin, St. Mary, Terrebonne.
 
Michigan
 
Counties of Delta, Dickinson, Gogebic, Houghton, Iron, Marquette, Menominee, Ontonagon.
 
Minnesota
 
Counties of Aitkin, Anoka, Blue Earth, Carlton, Carver, Cass, Chisago, Crow Wing, Dakota, Dodge, Faribault, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti, Itasca, Kanabec, Le Sueur, Martin, Olmsted, Pine, Ramsey, Rice, Scott, Sherburne, Sibley, Wabasha, Waseca, Washington, Watonwan, Winona, Wright.
 
Montana
 
Counties of Cascade, Custer, Daniels, Dawson, Fallon, Flathead, Glacier, Lake, Lewis and Clark, Liberty, Lincoln, McCone, Pondera, Prairie, Richland, Roosevelt, Sanders, Sheridan, Teton, Toole, Valley, Wibaux.
 
Nevada
 
Carson City. Counties of Churchill, Douglas, Elko, Eureka, Humboldt, Lander, Lincoln, Lyon, Nye, Pershing, Storey, Washoe, White Pine.
 
New Mexico
 
Counties of Chaves, DeBaca, Dona Ana, Eddy, Guadalupe, Lea, Lincoln, Luna, Otero, Roosevelt, Sierra, Socorro, Torrance, Union.
 
North Carolina
 
Counties of Alexander, Alleghany, Ashe, Avery, Bertie, Buncombe, Burke, Cabarrus, Caldwell, Camden, Catawba, Cherokee, Chowan, Clay, Cleveland, Currituck, Dare, Edgecombe, Gaston, Gates, Graham, Greene, Halifax, Haywood, Henderson, Hertford, Iredell, Jackson, Lincoln, McDowell, Macon, Madison, Martin, Mecklenburg, Mitchell, Nash, Northampton, Pasquotank, Perquimans, Pitt, Polk, Rowan, Rutherford, Swain, Transylvania, Vance, Warren, Watauga, Wayne, Wilkes, Wilson, Yadkin, Yancey.
 
North Dakota
 
Counties of Adams, Billings, Bowman, Burke, Divide, Dunn, Golden Valley, Grant, Hettinger, McKenzie, McLean, Mercer, Morton, Mountrail, Oliver, Slope, Stark, Ward, Williams.
 
Oklahoma
 
Counties of Alfalfa, Atoka, Beaver, Beckham, Blaine, Bryan, Caddo, Carter, Choctaw, Cimarron, Coal, Comanche, Cotton, Custer, Dewey, Ellis, Garfield, Garvin, Grady, Greer, Harmon, Harper, Hughes, Jackson, Jefferson, Johnston, Kingfisher, Kiowa, Love, McClain, Major, Marshall, Murray, Pittsburg, Pontotoc, Roger Mills, Stephens, Texas, Tillman, Washita, Woods, Woodward.
 
Oregon
 
Counties of Curry, Harney, Josephine, Lake.
 
South Carolina
 
Counties of Abbeville, Aiken, Allendale, Anderson, Bamberg, Barnwell, Cherokee, Chester, Edgefield, Fairfield, Greenville, Greenwood, Lancaster, Laurens, Lexington, McCormick, Newberry, Oconee, Orangeburg, Pickens, Richland, Saluda, Spartanburg, Union, York.
 
Tennessee
 
Counties of Anderson, Bedford, Benton, Bledsoe, Blount, Bradley, Campbell, Cannon, Carter, Cheatham, Claiborne, Clay, Cocke, Coffee, Cumberland, Davidson, DeKalb, Dickson, Fentress, Franklin, Grainger, Greene, Grundy, Hamblen, Hamilton, Hancock, Hawkins, Henry, Houston, Humphreys, Jackson, Jefferson, Johnson, Knox, Loudon, McMinn, Macon, Marion, Meigs, Monroe, Montgomery, Moore, Morgan, Overton, Pickett, Polk, Putnam, Rhea, Roane, Robertson, Rutherford, Scott, Sequatchie, Sevier, Smith, Stewart, Sullivan, Sumner, Trousdale, Unicoi, Union, Van Buren, Warren, Washington, White, Williamson, Wilson.
 
Texas
 
Counties of Andrews, Aransas, Archer, Atascosa, Austin, Bandera, Bastrop, Baylor, Bee, Bell, Bexar, Blanco, Borden, Bosque, Brazoria, Brazos, Brooks, Brown, Burleson, Burnet, Caldwell, Calhoun, Callahan, Cameron, Chambers, Childress, Clay, Coke, Coleman, Collingsworth, Colorado, Comal, Comanche, Concho, Cooke, Coryell, Cottle, Crane, Crockett, Crosby, Culberson, Dallam, Dawson, Denton, DeWitt, Dickens, Dimmit, Duval, Eastland, Ector, Edwards, El Paso, Erath, Falls, Fayette, Fisher, Foard, Fort Bend, Freestone, Frio, Gaines, Galveston, Garza, Gillespie, Glasscock, Goliad, Gonzales, Grayson, Grimes, Guadalupe, Hamilton, Hardeman, Harris, Haskell, Hays, Hidalgo, Hill, Houston, Howard, Hudspeth, Irion, Jack, Jackson, Jeff Davis, Jim Hogg, Jim Wells, Jones, Karnes, Kendall, Kenedy, Kent, Kerr, Kimble, King, Kinney, Kleberg, Knox, Lampasas, La Salle, Lavaca, Lee, Leon, Liberty, Limestone, Lipscomb, Live Oak, Llano, Loving, McCulloch, McLennan, McMullen, Madison, Martin, Mason, Matagorda, Maverick, Medina, Menard, Midland, Milam, Mills, Mitchell, Montague, Montgomery, Motley, Navarro, Nolan, Nueces, Palo Pinto, Parker, Polk, Presidio, Reagan, Real, Reeves, Refugio, Robertson, Runnels, San Jacinto, San Patricio, San Saba, Schleicher, Scurry, Shackelford, Starr, Stephens, Sterling, Stonewall, Sutton, Taylor, Throckmorton, Tom Green, Travis, Trinity, Upton, Uvalde, Val Verde, Victoria, Walker, Waller, Ward, Washington, Webb, Wharton, Wichita, Wilbarger, Willacy, Williamson, Wilson, Winkler, Wise, Young, Zapata, Zavala.
 
Utah
 
Counties of Juab, Millard, Tooele.
 
Virginia
 
Cities of Bristol, Chesapeake, Emporia, Franklin, Galax, Norton, Radford, Suffolk, Virginia Beach. Counties of Bland, Brunswick, Buchanan, Carroll, Craig, Dickenson, Floyd, Giles, Grayson, Greensville, Isle of Wight, Lee, Mecklenburg, Montgomery, Pulaski, Roanoke, Russell, Scott, Smyth, Southampton, Sussex, Tazewell, Washington, Wise, Wythe.
 
Washington
 
Counties of Chelan, Clallam, Douglas, Grant, Grays Harbor, Jefferson, Mason, Okanogan.
 
West Virginia
 
Counties of Boone, Lincoln, Logan, McDowell, Mercer, Mingo, Monroe, Raleigh, Summers, Wayne, Wyoming.
 
Wisconsin
 
Counties of Adams, Ashland, Barron, Bayfield, Buffalo, Burnett, Chippewa, Clark, Door, Douglas, Dunn, Eau Claire, Florence, Forest, Iron, Jackson, Juneau, La Crosse, Langlade, Lincoln, Marathon, Marinette, Menominee, Monroe, Oconto, Oneida, Outagamie, Pepin, Pierce, Polk, Portage, Price, Rusk, St. Croix, Sawyer, Shawano, Taylor, Trempealeau, Vilas, Washburn, Waupaca, Wood.
 
Wyoming
 
Counties of Fremont, Lincoln, Sublette, Sweetwater, Uinta.