Many forest landowners miss opportunities to save on their income and property taxes. Even accountants and tax experts may not be aware of some of the provisions covering woodland ownership, timber sales income, and reforestation expenses. It can pay dividends to become familiar with some of the tax programs and policies that might save you money and inform how you execute your woodland management in the future.
Several states offer programs that reduce property tax liability for woodland owners who meet certain requirements and enroll in and abide by the regulations of state forestland programs. These programs vary by state, but may provide a variety of benefits, including property tax liability reduction, forest management plans, and management assistance. Contact your state forestry or natural resources agency to see what may be available and if it meets your property management goals.
The sale of timber will generally trigger a tax bill, but knowing how timber is taxed and how to manage your tax liability can save you significant money in some cases. Your professional forester can help you navigate the tax issues related to selling timber, but becoming familiar with the ways you can manage your tax liability can help you plan now and into the future.
The Woodland Stewards Regional Extension Program for Landowners was developed by a collaborative team of forestry Extension professionals from eleven different organizations. This is the fourth year of the series and other webinars from the current and past series can be accessed on the Webinar Portal. A series beginning on January 18th will provide an introduction to the tax management topics you may encounter as a forest land owner.
All webinars will be held at 1:00pm Eastern time:
January 18th: Seeing the Forest for the Trees: An Overview of Forestry Taxes
January 25th: Basics of Timber Basis: Re(setting) the Table
February 1st: Timber Management Expenses and Deductions
February 8th: Keeping More of Your Timber Income Following a Timber Sale
February 15th: Coping with losses from Nature and Chance
Visit this website to sign up for these programs, Forestry Taxes: Learn, Plan & Save Money.
All webinars will be recorded and will be available a few days after the presentation, at the same link.
The National Timber Tax website is another resource to learn more about the tax rules and opportunities landowners may utilize. This site contains abundant resources, decision tools, and references to help you with your tax management planning.
Finally, keep good records of your expenses and activities. Tax law and policy can change, but having good records can help you adapt and support your management program.
Tax Tips for Forest landowners for the 2023 Tax Year (169kb pdf), USDA, U.S. Forest Service, University of Georgia, University of Florida
Classified Forest and Wildlands Program , Indiana Department of Natural Resources: Division of Forestry
Find an Indiana Professional Forester, Indiana Forestry & Woodland Owners Association (IFWOA)
Determining Tax Basis of Timber, The Education Store, Purdue Extension’s resource center
How to Treat Timber Sale Income, The Education Store
Financial and Tax Aspects of Tree Planting, The Education Store
Lenny Farlee, Extension Forester
Purdue University Department of Forestry and Natural Resources
Hardwood Improvement & Regeneration Center (HTIRC)