Tax Tips for Forest Landowners

As a private forest landowner, you may start to think about timber taxes only after having a timber sale. However, each forest activity you conduct can have tax implications. Generally, all income received is taxable unless excluded by tax law, and nothing is deductible unless a provision allows it. Understanding the forest-related provisions and integrating tax planning into your forest management can help lower your overall taxes and increase disposable income.

• Know the classification of your forest ownership. Is it for personal/hobby use? Is it an investment? Is it a business?

• Understand timber sale income and recovery of timber basis.

• Consider reforestation tax incentives

• Deduct operating expenses and carrying charges

• Recover other major capital costs

• Claim casualty loss deduction when disaster hits

• Consider excluding qualified cost-sharing payments

• Consider conservation easement donation

• Defer taxes with like-kind exchanges

• Qualified business income (QBI) deduction

Download the 2022 version of the full document and view the Timber Tax webinar series here.*

*This publication is intended to be an informational and educational resource for you and your tax advisor, but is not intended as financial, tax, or legal advice. Please consult with your tax advisor concerning your particular tax situation. The information is current as of November 28, 2022.