Drought Sale


DEFINITION of '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.

BREAKING DOWN 'Drought Sale'

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).

  1. Net Proceeds

    The amount received by the seller after all costs and expenses ...
  2. Capital Loss

    The loss incurred when a capital asset (investment or real estate) ...
  3. Deferred Account

    An account that postpones tax liabilities until a future date. ...
  4. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  5. Deferred Income Tax

    A liability recorded on the balance sheet that results from income ...
  6. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
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