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Capital Gains When Selling Horses Or Cattle

Updated: Jul 22

To get a general view about how capital gains are taxed we recommend reading this post first.

Two brown cows

If you are a farm owner or equine professional, the sale or exchange of livestock used in your business may qualify for preferential tax rates as discussed last week if they are held for the required time period. This means that the gain from the sale of your livestock would be taxed as a capital gain if the holding period is 12 months or more. However, in the case of horses and cattle, the holding period is 24 months or more in order to qualify for the preferential tax treatment. Livestock included under this tax regulation are cattle, hogs, horses, mules, donkeys, sheep, goats, fur bearing animals, and other mammals. However, it does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, other birds, fish, frogs, or reptiles, etc.

To read full details, we recommend reading the Farmer's Tax Guide provided by the IRS.


This post may not contain a complete analysis of the tax issues discussed herein and does not represent official conclusions or advice regarding the matter.

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