The Forestry Forum is sponsored in part by:

iDRY Vacuum Kilns


Forestry Forum
Sponsored by:


TimberKing Sawmills



Toll Free 1-800-582-0470

LogRite Tools



Norwood Industries Inc.




Your source for Portable Sawmills, Edgers, Resaws, Sharpeners, Setters, Bandsaw Blades and Sawmill Parts

EZ Boardwalk Sawmills. More Saw For Less Money!

STIHLDealers.com sponsored by Northeast STIHL


Woodland Sawmills

Peterson Swingmills

 KASCO SharpTech WoodMaxx Blades

Turbosawmill

Sawmill Exchange

Michigan Firewood, your BRUTE FORCE Authorized Dealer

Baker Products

ECHO-Bearcat

iDRY Wood Lumber Vacuum Drying for everyon

Nyle Kiln Dry Systems

Chainsawr, The Worlds Largest Inventory of Chainsaw Parts

Smith Sawmill Service



Author Topic: Timber Sales Tax Question regarding reinvestment in the property  (Read 263 times)

0 Members and 1 Guest are viewing this topic.

Offline Industry_Jon

  • member
  • *
  • Posts: 2
  • I'm new!
    • Share Post
I canít find this answer anywhere online. If the landowner reinvests the proceeds from timber sales back into the property, (like improvements to an existing house on that property) could are those proceeds be exempt from taxes? 

I understand that there are some exceptions for capital gains taxes. Could this be one? 

Offline stavebuyer

  • Senior Member x2
  • *****
  • Posts: 1182
  • Location: KY
  • Gender: Male
    • Share Post
Re: Timber Sales Tax Question regarding reinvestment in the property
« Reply #1 on: March 07, 2021, 01:01:15 PM »
Capital improvements probably are not going to be deductible but may be depreciable. If you have a basis established in your timber prior to the harvest you may be able to deplete the basis amount and reduce your sale gain. Gets complicated pretty quickly. You need a competent tax professional familiar with timber tax issues. Most are not.

Offline Clark

  • Senior Member
  • ****
  • Posts: 891
  • Location: Duluth, MN
  • Gender: Male
    • Share Post
Re: Timber Sales Tax Question regarding reinvestment in the property
« Reply #2 on: March 07, 2021, 03:14:09 PM »
Generally speaking ďimprovementsĒ to the property that you want to deduct from a timber expense have to benefit the timber. So putting in new wall-to-wall carpeting in a house that happens to be on the property where the timber was cut is not going to pass muster with the IRS. 

For recreational landowners (meaning not industrial timberland owners) you can deduct expenses (including taxes) for the property from any income. You cannot create a negative income stream and then apply that to future taxes. Basically, $ out can be deducted from $ in to zero. Reforestation, trail/road access and equipment for maintenance can generally be deducted.

Clark
SAF Certified Forester

Offline Ron Scott

  • Forester
  • Administrator
  • *****
  • Posts: 8346
  • Age: 85
  • Location: Cadillac, MI
  • Gender: Male
    • Share Post
Re: Timber Sales Tax Question regarding reinvestment in the property
« Reply #3 on: March 07, 2021, 06:36:27 PM »
What Clark stated.

Any item deductions need to be directly related to your timber growing, harvesting, forest land improvements, and management, etc. for "commercial" timber sales.

https://www.fs.fed.us/spf/coop/library/timbertax.pdf
~Ron


Share via delicious Share via digg Share via facebook Share via linkedin Share via pinterest Share via reddit Share via stumble Share via tumblr Share via twitter

xx
New to timber sales

Started by abstoff15 on Forestry and Logging

5 Replies
688 Views
Last post January 18, 2019, 06:04:27 PM
by labradorguy
xx
Timber sales in NE TX or NW LA

Started by pattilou on Ask The Forester

1 Replies
883 Views
Last post July 20, 2012, 03:28:37 PM
by Texas Ranger
xx
Mapping timber sales

Started by Good Feller on Ask The Forester

7 Replies
2054 Views
Last post July 03, 2008, 10:52:53 PM
by Phorester
xx
Reporting Timber Sales to the IRS

Started by Gary_C on Forestry and Logging

17 Replies
14195 Views
Last post September 23, 2010, 02:29:45 PM
by mad murdock
 


Powered by EzPortal