Monday, October 31, 2016

Forest Service 2016 Timber Tax Tips Bulletin Available

Dr. Linda Wang, National Timber Tax Specialist with the U.S. Forest Service, has finalized Tax Tips for Forest Landowners for the 2016 Tax Year. This publication reviews the major Federal income tax laws to help you file your 2016 income tax return. Although tax laws on timber transactions are not common knowledge, they are an important part of the ongoing cost of owning and managing timber, engaging in forest stewardship activities, and complying with tax law.

Did you know that timber sale income can be treated as capital gains? If you aren’t familiar with this part of the tax code, now is your chance to talk to your tax accountant about it, as there are a few extra steps that you will need to do to take advantage of this benefit.

There are certain eligibility requirements around accessing the benefits of capital gains.
·         - You must have purchased your land at least a year ago, or, if you received it as a gift, either you or the gifter must have owned the land for at least a year.
·         - Note: If you inherited your land, there is not a holding period requirement.
·         - You must not be organized as a corporation for tax purposes.

With capital gains, you might also want to think about your basis. The American Forest Foundation has additional resources on basis including an online video on Timber Tax Basis. 

For more on taxes go to the National Timber Tax Website.

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