Calculating the Amortization Deduction
A half-year convention applies to the amortization reforestation expenditures over 84 months. This means that only 1/14th of the eligible costs can be deducted the first year. One-seventh is deducted in years 2 through 7, and the remaining 1/14th in the eighth tax year. Multiply the total qualified expenses by 1/7th to determine the deduction for years 2-7.
Help me calculate my amortization schedule
The amount you can elect to amortize is the amount of your qualified reforestation expenditure that exceeds $10,000 in a given year. The amortization schedule allows 1/14th of the total to be deducted in years 1 and 8, and 1/7th in years 2 through 7. The following example demonstrates this. The example assume the expenditures are made in 2005.
Help me calculate my amortization deductions.
Example Amortization Schedule:
Total reforestation expenses: $25,000
Amount deducted: $10,000
Amount to be amortized: $15,000
| Year | Proportion | Amortization Schedule |
| 2005 | 1/14 | $1,071.42 |
| 2006 | 1/7 | $2,142.86 |
| 2007 | 1/7 | $2,142.86 |
| 2008 | 1/7 | $2,142.86 |
| 2009 | 1/7 | $2,142.86 |
| 2010 | 1/7 | $2,142.86 |
| 2011 | 1/7 | $2,142.86 |
| 2012 | 1/14 | $1,071.42 |
| Total | 7/7 | $15,000 |