Counties Eligible for Extended Replacement Period for Livestock Sold Due to Drought - 2010

September 22, 2010 | Roger McEowen

 

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 non-recognition 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. 

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, 2010, in Notice 2010-64.  Here's a list of the counties for which the 12-month period ending August 31, 2010 is not a drought-free year:

Arizona

Counties of Apache, Cochise, Coconino, Gila, Graham,  Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima,  Pinal, Santa Cruz, Yavapai, Yuma.

Arkansas

Counties of Arkansas, Ashley, Chicot, Clay, Columbia, Desha, Drew, Greene, Lafayette, Ouachita, Phillips, Union.

California

Counties of Alameda, Amador, Butte, Calaveras, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake, Lassen, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Modoc, Monterey, Napa, Nevada, Orange, Placer, Plumas, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Joaquin, San Luis Obispo, Santa Barbara, Santa Clara, Shasta, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, Yuba.

Colorado

Counties of La Plata, Montezuma.

Delaware

County of Sussex.

Hawaii

Counties of Hawaii, Honolulu, Kalawao, Kauai, Maui.

Idaho

Counties of Bear Lake, Benewah, Bonner, Bonneville, Caribou, Clearwater, Fremont, Idaho, Kootenai, Latah, Madison, Shoshone, Teton.

Kentucky

Counties of Carlisle, Fulton, Hickman.

Louisiana

Parishes of Avoyelles, Beauregard, Bienville, Bossier, Caddo, Caldwell, Catahoula, Claiborne, Concordia, De Soto, East Carroll, Franklin, Grant, Jackson, La Salle, Lincoln, Madison, Morehouse, Natchitoches, Ouachita, Rapides, Red River, Richland, Sabine, Tensas, Union, Vernon, Webster, West Carroll, Winn.
 
Maryland

Counties of Allegany, Anne Arundel, Calvert, Charles, Dorchester, Frederick, Garrett, Prince George's, Saint Mary's, Somerset, Washington, Wicomico, Worcester.

Michigan

Counties of Alger, Baraga, Charlevoix, Chippewa, Delta, Dickinson, Gogebic, Houghton, Iron, Keweenaw, Luce, Mackinac, Marquette, Menominee, Ontonagon, Schoolcraft.

Minnesota

Counties of Aitkin, Anoka, Beltrami, Cass, Chisago, Cook, Crow Wing, Dakota, Hennepin, Hubbard, Isanti, Itasca, Koochiching, Lake, Pine, Ramsey, Saint Louis, Sherburne, Washington, Wright.

Mississippi

Counties of Bolivar, Coahoma, Humphreys, Issaquena, Leflore, Quitman, Sharkey, Sunflower, Tallahatchie, Tunica, Warren, Washington, Yazoo.
 
Missouri

Counties of Butler, Carter, Dunklin, Mississippi, New Madrid, Pemiscot, Ripley, Stoddard, Wayne.
 
Montana

Counties of Big Horn, Carbon, Flathead, Gallatin, Glacier, Granite, Lake, Lincoln, Mineral, Missoula, Park, Pondera, Ravalli, Sanders, Stillwater.

Nevada

Counties of Churchill, Clark, Esmeralda, Humboldt, Lincoln, Nye, Pershing, Washoe.

New Jersey

Counties of Atlantic, Burlington, Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset.
 
New Mexico

Counties of Hidalgo, McKinley, San Juan.

North Carolina

Counties of Franklin, Gates, Halifax, Hertford, Nash, Northampton, Union, Warren.
 
Oklahoma

Counties of Atoka, Bryan, Choctaw, Ellis, Harper, McCurtain, Pushmataha, Woods, Woodward.

Oregon

Counties of Harney, Jackson, Klamath, Lake.

Pennsylvania

Counties of Bedford, Bucks, Fayette, Franklin, Fulton, Somerset.

South Carolina

Counties of Chester, Chesterfield, Clarendon, Darlington, Dillon, Fairfield, Florence, Georgetown, Horry, Kershaw, Lancaster, Lee, Marion, Marlboro, Sumter, Williamsburg.

Tennessee

Counties of Dyer, Lake, Obion.

Texas

Counties of Aransas, Atascosa, Austin, Bandera, Bastrop, Bee, Bell, Bexar, Blanco, Bosque, Brazoria, Brazos, Brooks, Brown, Burleson, Burnet, Caldwell, Calhoun, Callahan, Cameron, Collin, Colorado, Comal, Comanche, Coryell, Dallas, Delta, Denton, DeWitt, Dimmit, Duval, Edwards, Ellis, Erath, Falls, Fannin, Fayette, Fort Bend, Freestone, Frio, Galveston, Gillespie, Goliad, Gonzales, Grayson, Grimes, Guadalupe, Hamilton, Harris, Harrison, Haskell, Hays, Hidalgo, Hill, Hood, Hopkins, Houston, Hunt, Jackson, Jasper, Jim Hogg, Jim Wells, Johnson, Jones, Karnes, Kaufman, Kendall, Kenedy, Kerr, Kimble, Kinney, Kleberg, Lamar, Lampasas, La Salle, Lavaca, Lee, Leon, Limestone, Live Oak, Llano, McLennan, McMullen, Madison, Marion, Matagorda, Maverick, Medina, Milam, Mills, Montgomery, Nacogdoches, Newton, Nueces, Panola, Rains, Real, Refugio, Robertson,  Rockwall, Rusk, Sabine, San Augustine, San Patricio, San Saba, Shackelford, Shelby, Somervell, Starr, Stephens, Throckmorton, Travis, Trinity, Uvalde, Val Verde, Van Zandt, Victoria, Walker, Waller, Washington, Webb, Wharton, Willacy, Williamson, Wilson, Zapata, Zavala.

Utah

Counties of Kane, Rich, San Juan, Washington.

Virginia

Cities of Charlottesville, Colonial Heights, Emporia, Franklin, Hopewell, Newport News, Petersburg, Poquoson, Richmond, Suffolk, Williamsburg, Winchester. Counties of Accomack, Albemarle, Amelia, Brunswick, Buckingham, Caroline, Charles City, Chesterfield, Clarke, Culpeper, Cumberland, Dinwiddie, Essex, Fauquier, Fluvanna, Frederick, Gloucester, Goochland, Greene, Greensville, Hanover, Henrico, Isle of Wight, James City, King and Queen, King George, King William, Lancaster, Loudoun, Louisa, Lunenburg, Madison, Mathews, Mecklenburg, Middlesex, New Kent, Northampton, Northumberland, Nottoway, Orange, Page, Powhatan, Prince George, Rappahannock, Richmond, Rockingham, Shenandoah, Southampton, Spotsylvania, Surry, Sussex, Warren, Westmoreland, York.

Washington

Counties of Chelan, Clallam, Douglas, Grant, Grays Harbor, Jefferson, Kittitas, Mason, Okanogan.

West Virginia

Counties of Berkeley, Grant, Hampshire, Hardy, Jefferson, Mineral, Morgan, Preston, Tucker.

Wisconsin

Counties of Ashland, Barron, Bayfield, Burnett, Chippewa, Clark, Door, Douglas, Dunn, Eau Claire, Florence, Forest, Iron, Langlade, Lincoln, Marathon, Marinette, Menominee, Oconto, Oneida, Polk, Price, Rusk, Saint Croix, Sawyer, Shawano, Taylor, Vilas, Washburn.

Wyoming

Counties of Big Horn, Fremont, Lincoln, Park, Sublette, Sweetwater, Teton.