Help forest owners navigate the tax code
02 Aug 2021
Since Congress revised the federal tax code in December 2017, forest owners and forest business owners have struggled to understand how the new changes will affect them in 2018.
Fortunately, the USDA Forest Service Forest taxation and estate planning program is here to help private forest owners, foresters, loggers and logging companies navigate the new rules.
Growing and caring for wood is a long-term investment. Since trees can take many years to mature, forests are managed over several decades. A landowner who plants seedlings in 2018 may not see a return on that investment until decades later, assuming no trees are lost due to forest fire, insect infestation, etc. hurricane or other natural disaster.
While waiting for the trees to mature, forest owners take steps to ensure the health of the trees in their care: they manage weeds and invasive insects, clear forests to produce quality wood, maintain cuttings. -fire to reduce the risk of forest fire and can maintain roads. This work requires money. Fortunately, the federal tax provisions help keep stewardship efforts affordable by allowing the deduction for tree planting and forest management.
The Forest Taxation and Estate Planning program, under the agency’s state and private cooperative forestry program, provides national leadership on forest tax policy essential to private forest management and serves as a source of information. reliable information on the complex fiscal issues associated with forest management.
Program staff follow the latest changes in tax legislation and share information on forest tax policy and estate planning through publications such as the Federal Timber Income Tax: A Quick Guide for Forest Owners and A Forest Owner’s Guide to Federal Income Tax (PDF, 17MB), as well as through presentations, workshops and webinars. These tax guidelines help private forest owners and rural communities manage their land sustainably.
Last year, Congress passed new tax law changes to provide relief for taxpayers affected by Hurricanes Harvey, Irma and Maria. Linda Wang, timber tax specialist, summarized these changes in Income tax deduction on loss of timber and landscaped trees in the event of a claim (PDF, 154 KB).
Wang travels the country providing workshops for private landowners, foresters, forest business owners, accountants and tax preparers, as well as online webinars on updated tax laws affecting forest owners. Every year it also updates Tax advice for forest owners (PDF, 68 KB), a much awaited resource not only by forest owners, but also by forest consultants, accountants, lawyers and land managers of public bodies.
“As a forester in the field, I’m not very familiar with taxation,” said Forest Service Mark E. Rickey of Ohio. “I distribute these resources with every stewardship plan I prepare for private landowners in my service area. This information helps me educate landowners and the professionals they employ on how to achieve quality and sustainable forestry.