Tax Deductions for Storm Damaged Timber

[Kirk_Allen]

I came across this site while doing some research and found it to be worthwhile.   8)
http://www.timbertax.org/
http://www.arnatural.org/forestry/Ice_Damage/storm_damaged_timber_taxes.asp


The last storm that hit my dads place destroyed 15+ trees on the home place and another 30 or so at the farm house property.

Looks like he will have a nice deduction on 2003 taxes.

Kirk

[Ron Wenrich]

Well, that depends.

You will only be able to recover the timber basis.  The timber basis is the original value of your timber.  To establish your timber basis, you should have a timber inventory and appraisal when the land changes hands.  Of course, your realtor advised you of this.  Right?  (Probably not).

If you've owned the land for any amount of time, your timber basis is probably pretty low.  Trees were smaller and the value was lower.

I've had a few jobs where recent landowners made out pretty well.  When we had a lot of gypsy moth mortality, I had one landowner who used capital gains since it was a forced sale.  He made out real well.

But, you must make an attempt to salvage the material.  If you sell it, then you don't have a loss, you have a gain.  You are taxed on what has grown - the price less the basis.  No basis, then you pay tax on all of it.