Download Full Text (954 KB)
During the course of operating a farm or ranch business, producers will dispose of property (e.g., livestock, equipment, real estate, etc.) used in the business. This can occur in a variety of ways with two common methods being sales of assets and trading (like-kind exchange) of property. The purpose of this fact sheet is to discuss and illustrate correct income tax reporting when business assets are sold.
This discussion also addresses, for income tax purposes, different types of business assets and their tax treatment upon selling them. One common example is the sale of cull breeding animals that were raised by the operator of the farm or ranch. Though these animals may be regarded as “farm products” by business operators, for income tax purposes these animals may receive capital gains treatment.
Rural Tax Education
sale, business, property, funds
Education | Higher Education | University Extension
van der Hoeven, Guido, "Sale of Business Property" (2010). Rural Tax Education. 6.