Sales Caused by Weather-Related Conditions: Farm Business Taxes (2025 IRS Guide)

This guide covers “Sales Caused by Weather-Related Conditions” within farm business taxes. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 225 (2025), Farmer's Tax Guide, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Sales Caused by Weather-Related Conditions

If you sell or exchange more livestock, including poultry, than you normally would in a year because of a drought, flood, or other weather-related condition, you may be able to postpone reporting the gain from the additional animals until the next year. This applies to livestock that are held for sale (either raised or purchased) as well as livestock held for draft, breeding, sport, or dairy purposes. You must meet all the following conditions to qualify.

• Your principal trade or business is farming.

• You use the cash method of accounting.

• You can show that, under your usual business practices, you wouldn’t have sold or exchanged the additional animals this year except for the weather-related condition.

• The weather-related condition caused an area to be designated as eligible for assistance by the federal government.

.Disaster assistance and emergency relief for individuals and businesses. Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Get the latest tax relief guidance in disaster situations at IRS.gov/uac/Tax-Relief-in-Disaster-Situations and with regards to disaster area losses, at IRS.gov/businesses/Small-Businesses-Self-Employed/Disaster-Assistance-and-Emergency-Relief-for-Individuals-and-Businesses. .

Sales or exchanges made before an area became eligible for federal assistance qualify if the weather-related condition that caused the sale or exchange also caused the area to be designated as eligible for federal assistance. The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal departments or agencies.

.A weather-related sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes may be an involuntary conversion. See Other Involuntary Conversions in chapter 11. Table 3-2 shows a comparison of the difference between Section 451(g) and Section 1033(e)..

.If you qualified for a 4-year replacement period for livestock sold or exchanged on account of drought under Notice 2006-82 and if your replacement period is scheduled to end in 2025, the replacement period is extended if the applicable region includes any county listed on Notice 2025-52. This extension period will continue until your first tax year ending after a drought-free year in the applicable region..

Table 3-2. Sales Caused by Weather-Related Conditions

Usual business practice.

You must determine the number of animals you would have sold had you followed your usual business practice in the absence of the weather-related condition. Do this by considering all the facts and circumstances, but don’t take into account your sales in any earlier year for which you postponed the gain. If you haven’t yet established a usual business practice, rely on the usual business practices of similarly situated farmers in your general region.

Connection with affected area.

The livestock doesn’t have to be raised or sold in an area affected by a weather-related condition for the postponement to apply. However, the sale must occur solely because of a weather-related condition that affected the water, grazing, or other requirements of the livestock. This requirement generally won’t be met if the costs of feed, water, or other requirements of the livestock affected by the weather-related condition aren’t substantial in relation to the total costs of holding the livestock.

Classes of livestock.

You must figure the amount to be postponed separately for each generic class of animals—for example, hogs, sheep, and cattle. Don’t separate animals into classes based on age, sex, or breed.

Amount to be postponed.

Follow these steps to figure the amount of gain to be postponed for each class of animals.

1. Divide the total income realized from the sale of all livestock in the class during the tax year by the total number of such livestock sold. For this purpose, don’t treat any postponed gain from the previous year as income received from the sale of livestock.

2. Multiply the result in (1) by the excess number of such livestock sold solely because of weather-related conditions.

Example.

You’re a calendar-year taxpayer and you normally wean 100 beef calves in the fall and feed them through the winter, selling in January or February. As a result of drought, you decide you don’t have enough feed for all of your calves, so you sell 35 head in the fall at weaning and plan to sell the remaining 65 calves in January. As a result, you sold 135 head in 2024 (100 sold in February and 35 sold at weaning in 2024). You realized $121,500 from the sale ($121,500 ÷ 135 = $900 per head). On August 10, 2024, as a result of drought, the affected area was declared a disaster area eligible for federal assistance. The income you can postpone until 2025 is $31,500 [($121,500 ÷ 135) × 35].

How to postpone gain.

To postpone gain, attach a statement to your tax return for the year of the sale. The statement must include your name and address and give the following information for each class of livestock for which you’re postponing gain.

• A statement that you’re postponing gain under section 451(g).

• Evidence of the weather-related conditions that forced the early sale or exchange of the livestock and the date, if known, on which an area was designated as eligible for assistance by the federal government because of weather-related conditions.

• A statement explaining the relationship of the area affected by the weather-related condition to your early sale or exchange of the livestock.

• The number of animals sold in each of the 3 preceding years.

• The number of animals you would have sold in the tax year had you followed your normal business practice in the absence of weather-related conditions.

• The total number of animals sold and the number sold because of weather-related conditions during the tax year.

• A computation, as described above, of the income to be postponed for each class of livestock.

Generally, you must file the statement and the return by the due date of the return, including extensions. However, for sales or exchanges treated as an involuntary conversion from weather-related sales of livestock in an area eligible for federal assistance (discussed in chapter 11), you are required to attach a statement in the year you realize the gain and again in the year you replace the livestock. For other sales or exchanges, if you timely filed your return for the year without postponing gain, you can still postpone gain by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach the statement to the amended return and write “Filed pursuant to section 301.9100-2” at the top of the amended return. File the amended return at the same address you filed the original return. Once you have filed the statement, you can cancel your postponement of gain only with the approval of the IRS.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

• Publication 225 (2025), Farmer's Tax Guide: Farm Income — Sales of Farm Products — Sales Caused by Weather-Related Conditions — Internal Revenue Service; 2025 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.