Drought Sale

Drought Sale

When a farmer is forced to sell more animals than in a typical year because of poor weather conditions. The profits from the livestock sales can be deferred to the following year, even if the proceeds exceed the losses.

Notes:

The tax deferral is not exclusive to a drought situation. Losses due to unexpected epidemic (disease outbreak) ravaging the livestock or other uncharacteristically massive losses (floods, fires, etc).

See also: Bankruptcy, Capital Gain, Capital Loss, Deferred Account, Deferred Income Tax, Recognized Gain, Recognized Loss