Drought Related Sales

[gman]

Additional livestock sold because of drought in a federal declared area are eligible for gain
to be postponed for 3 years, in which replacement livestock must be purchased and
then has a zero basis. Is this correct??
Where might I find a summary of this info. and the counties declared disaster?

Thanks

[Unregistered]

You might try IRS Pub. 4492, 553 and of course 225

[Jiggers]

Replacement Cost

They may or may not have a zero basis. If the gain postponed is less than the replacement cost, the excess amount is depreciated. Example: Gain postponed $600, replacement cost $900, excess amount $300 is depreciated.

See IRS Pub 225 and IRS recent notices about this because the replacement period is 4 years and this may be extended for one year.