Forest management in the eastern United States is faced with many modern challenges. Professional foresters have an innovative set of management options for the maintenance of healthy forest ecosystems. But some options raise public objections when applied to public lands (e.g., types of timber harvest, prescribed fire) and the effects of some management options on forests and their native inhabitants are poorly understood. Moreover, forest lands in the eastern and Midwestern United States primarily are in small privately-owned parcels that change ownership relatively frequently. These lands are often managed for short-term financial gains rather than long-term sustainability.
As populations of some forest organisms decline, restrictions on landowners may increase because species become classified as endangered or threatened (e.g., the Indiana bat), while increasing populations of other species (white-tailed deer, invasive plants) create economic and ecological challenges. These problems are compounded by the lack of scientifically rigorous research on the overall impacts of forest management on the effected ecosystems and their components. To address this set of issues, the HEE, a long-term, large-scale experimental study of forest management and its impacts, was initiated in 2006.
Many of Indiana’s forests have been dominated by oak and hickory trees for thousands of years. The historical conditions that shaped today’s forests have changed, altering forest composition and leading land managers to wonder what can be done to maintain oak and hickory forests for the future. The Hardwood Ecosystem Experiment: 2006-2016 provides an overview of findings for the first 10 years of the HEE, 100 year project.
If you would like to start receiving “The HEE Update,” please email Charlotte Owings, the HEE project coordinator, at firstname.lastname@example.org. If you do not have an email address, you may still receive the newsletter by regular postal mail – call Charlotte Owings at 765-494-1472.
The tax filing due date is closing in. If you have not already done so, it is time to collect information and plan for your return. Woodland owners may be able to take advantage of some parts of the tax code to reduce their bill if they know what to look for, how to file and how to receive the best treatment of their income under the law. Several resources are available to help you drill down to those parts of the code that could provide you with some tax breaks.
Sale of Timber
For those who have sold timber in 2018, depending on your individual situation, you may be able to deduct the costs associated with selling timber and the cost basis of the harvested timber from gross income. Basis is the amount you paid for the timber when you purchased the land or the value of the timber when you inherited it. Since timberland is normally sold at a value per acre combining both the bare land and timber value, some information on the amount and value of standing timber needs to be collected and some calculations done to determine basis. A professional forester can help you collect this information and calculate your basis.
The best time to figure timber basis is when the land is purchased or inherited, but a forester can help you determine timber basis years after the property was acquired. Since basis represents the value at the time of acquisition, as the years pass and the trees grow, basis becomes a smaller percentage of the total timber value for the property. The basis for gifted properties is normally the basis of the person making the gift. The basis for inherited properties is recalculated to the value of the land and timber at the time of the inheritance. This provides an opportunity for families to pass appreciated timberland to heirs with a stepped-up basis representing the growth in value over that ownership period. If the heirs decide to have a harvest after that date, they have a significant basis value to apply against income, reducing income tax liability.
Tree Planting for Timber Production
Costs associated with planting at least one acre of trees for timber production may be eligible for deductions that could reduce your tax bill. Taxpayers may deduct up to $10,000 ($5,000 for married couples filing separately) per year of reforestation costs per qualified timber property. Any amount over $10,000 per year per qualified timber property may be deducted (amortized) over a period of 84 months.
The tax rules pertaining to timber management and tree planting are dependent on the personal use, investment, or business status of your property and your individual circumstances. Foresters and tax advisors familiar with rules for timberlands can help you develop an appropriate tax management approach.
The National Timber Tax website is a clearinghouse for information related to understanding and managing the taxation of timberlands and tree plantations, as well as changes to the tax laws. Visit National Timber Tax to see how the resources and tools on this site may help you manage your taxes.
The information in this article is intended to help you find resources to answer tax questions but should not be considered individual tax advice. Consult appropriate tax codes and professionals about your individual circumstances.
Successfully starting a tree plantation involves several steps, ideally starting with preparation a year or more before the seedlings are planted. This updated publication with current resources titled Resources and Assistance Available for Planting Hardwood Seedlings, landowners can find valuable information about planting trees for conservation, such as resources, contact information, tools, professional advice and assistance and financial incentives.
The Indiana DNR bovine tuberculosis surveillance team earned the Excellence in Conservation Award from the Midwest Fish and Wildlife Agency for their bovine tuberculosis surveillance and monitoring efforts in 2016.
In 2016, a wild white-tailed deer tested positive for bovine tuberculosis in Franklin County, Indiana. Bovine tuberculosis is a bacterial disease most often found in cattle and captive cervids, but can be transmitted to wild white-tailed deer and other wild mammals. The DNR tested more than 2,000 hunter-harvested deer in 2016 and did not find another bovine tuberculosis positive deer. For more information on bovine tuberculosis in wild white-tailed deer check out our Purdue Extension-FNR webpage: Bovine Tb in wild white-tailed deer: background and frequently asked questions.
The Emerald Ash Borer University is a collaborative effort of Michigan State University, Purdue University, the Ohio State University, Michigan University and Ohio University to provide comprehensive, accurate and timely information on the emerald ash borer to it’s viewers. As of September 21st, it has launched it’s Fall 2017 Webinar in order for the public to become more informed on Emerald Ash Borers. The schedule is as follows:
Take a look at the recent Indiana Woodland Steward Newsletter, a resource that’s full of a variety of valuable information to foresters, woodland owners, timber marketing specialists and any woodland enthusiasts. This issue includes topics such as a forest management, what private woodland owners are doing about invasive plants, the threat of callery pears, as well as much more.
Check out this IWS Newsletter to stay current in the world of forestry, and feel free to browse archived articles dating back to 1992 for more information.
Tax preparation time usually brings with it questions about what is deductible, how do I report this income, and what can I do to save on my taxes in the future. Fortunately for woodland owners, there are several excellent resources available to help you find some guidance.
A national site addressing tax issues for woodland owners is the National Timber Tax Website. This site provides updated tax tips for the 2016 filing year, as well as many guides and references to help you effectively plan a tax strategy for your property.
As part of a new educational video project, Purdue Extension offers essential tips on how to select veneer trees and logs that demand a premium.
The video features Dan Cassens, a professor of wood products at Purdue University, and Greg Hartog of Danzer Americus in Edinburgh, Ind. They give comprehensive details about preferred tree species as well as characteristics, including defects, that are important to the veneer industry.
The advice should be of particular interest to landowners, log brokers, sawmill operators and forestry consultants in Indiana and throughout the hardwood region. Indiana has had a long history of supplying the industry with quality veneer logs and veneer since the early 1900s, Cassens said.
What comes to mind when you think of Purdue Extension? Agriculture and natural resources? Maybe Indiana 4-H? Right on both counts, but perhaps you don’t know how #PurdueExtension helps build health coalitions statewide. Or how we’re revitalizing economic opportunity in Indiana’s rural regions, helping immigrants acclimate to life in our state, or offering parents programs that build confidence and strengthen families. Learn about all of this and more in the 2016 Purdue Extension Annual Report!
Woodlands provide a multitude of environmental (e.g., carbon sequestration, enhance water quality, wildlife habitat), economic (e.g., timber, wood products manufacturing, tourism), and social (e.g., recreation, aesthetics) benefits to Indiana residents. The sustainability of these benefits is strongly tied to stability of the resource. In Indiana, 75 percent of the 4.65 million acres of forestland is owned by families. Actions they take on their property can impact the benefits woodlands provide all Indiana residents. However, many do not understand available options or sources of assistance.
What Has Been Done
The Department of Forestry and Natural Resources, in partnership with many other organizations, helps produce and mail over 31,000 copies of the Indiana Woodland Steward to woodland owners three times each year. This 16-page, two-color publication includes in-depth articles on forest stewardship and health, invasive species and pests, wildlife habitat management, economics, and more.
Subscribers owned more woods (71.6 ac) for a longer tenure (33 years) than the average woodland owner in Indiana based on data from the National Woodland Owner Survey. As a group, they were also more active managers based on the proportion enrolled in assistance programs and who had a written stewardship plan. Fifty-four percent regularly utilized information from the Woodland Steward. In addition, 51 percent of respondents have implemented at least one practice they read about from The Woodland Steward, potentially impacting an estimated 1.2 million acres of forestland. His use of print media to communicate with woodland owners could be considered expensive, but clearly a large number of woodland owners regularly read and utilize the information making the average investment per landowner much lower.