U.S. Senator Mike Enzi, R-Wyo., is pleased livestock producers forced to sell stock due to drought conditions now have more time to replace herds.
The Department of Treasury recently granted a request in an August 2, 2006 letter from Enzi and other senators, including Craig Thomas, R-Wyo., to allow an extension of the capital gains tax deferral period for livestock producers who were affected by drought conditions in 2002 and as a result had to sell their draft, breeding or dairy stock and who are still experiencing drought conditions. An extension of the capital gains tax deferment would allow producers to re-invest in livestock at a more reasonable time when weather conditions can better sustain increased herd numbers.
"Western livestock producers have felt the ongoing affects of drought for several years and in 2002 the majority of Wyoming counties were designated as disaster areas due to drought. This extension will allow producers more flexibility when deciding when to re-invest in more stock at a time that is most convenient for them," said Enzi. "Senator Thomas took the lead as a member of the Finance Committee to help get this extension through. He recognizes the need in Wyoming."
This month the Internal Revenue Service will publish a list of counties that experienced exceptional, extreme or severe drought conditions in the 12 month period ending August 31, 2006. Producers who live in the listed categories will be eligible for the extension.
In 2004 Congress extended the tax deferment period for weather-related sales of livestock with hope that producers would replenish herds by 2006. Due to the persisting drought conditions since then another extension was needed, according to Enzi.
Click below to view the August 2 letter.