Index
A
Accounting methods............................................ 101
Accounts—Also see specific account.............................12, 104
Accrual accounting ........................................................79, 101
Active income or loss—Also see Material participation..... 87
Adjusted basis ..................................9, 18, 23, 31, 126, 130, 143
Administrative law............................... 89
Afforestation expenses........................ See Establishment costs
Agricultural Conservation Program (ACP)............. 44
Allocation of original basis...................................... 10, 12, 140
Allowable basis................................32, 60, 62, 72, 73, 139, 143
Alternate valuation date............................... 9
Alternative minimum tax ................................................ 21, 73
Alternative minimum taxable income.................... 73
Appeals.................................................................. 93
Appraisal ................................................. 9, 42, 56, 68, 140, 144
Audits....................................................................... 86, 92, 101
Average depletion ................................................ 104, 141, 142
B
Bargain sales, basis of....................................................10, 140
Basis....9, 17, 18, 21, 23, 26, 28, 31, 32, 53, 57, 59, 60, 62, 69, 72,
86, 125, 139
Block ................. 12, 57, 59, 60, 62, 130, 139, 141, 144, 145, 146
Brush control.......................................................... 13, 125, 126
Business expenses, recovering............ 13, 25, 27, 28, 62, 73, 79,
125, 126
Business use, property held for..............See Trade or business, property held for use in
Byproducts—Also see Nontimber forest products .......... 49, 83
C
Capital accounts—Also see Accounts.......................9, 104, 145
Capital asset .................................... 9, 12, 36, 37, 80, 126, 127
Capital costs ................................................................. 9, 26, 67
Capital gains and losses ...........25, 29, 32, 36, 37, 38, 41, 67, 71,
72, 73, 75, 80, 83, 126
Capital income accounts.......................... 106
Capitalization ........................................ 9, 13, 26, 125, 128, 130
Capitalize versus deduct ............................... 13, 15, 26, 29, 142
Carrying charges—Also see specific item....... 25, 26, 27, 28, 79
Case law ...........................................................................90, 91
Cash accounting .............................................................79, 101
Casualty losses ................ 12, 13, 28, 56, 62, 63, 64, 67, 129, 143
C corporations.....................................................26, 28, 87, 129
Chips ................................................................................49, 83
Christmas trees, as timber .......................................... 41, 75, 79
Christmas trees, expenses of producing.........................79, 125
Christmas trees, income from .................................. 75, 80, 126
Commercial tax services ..................................................89, 98
Community property............................................. 85
Condemnations .....................................................60, 62, 63, 64
Conservation easements...................................................68, 69
Conservation Reserve Program (CRP) ......... 13, 15, 44, 75, 128
Conservation Security Program (CSP) .................... 44, 47, 128
Consulting forester...........................12, 25, 31, 42, 57, 143, 145
Contract right to cut timber............... 42, 81, 126, 127, 128, 142
Conversion cost.....................................See Cost of conversion
Co-ownership...................................................................85, 86
Corporations—Also see C corporations and Subchapter S corporations.......................................... 26, 28, 29, 32, 86, 129
Cost of conversion............................................... 42
Costs—Also see specific cost........... 9, 25, 28, 31, 62, 67, 73, 79
Cost-sharing payments..........15, 44, 47, 49, 50, 75, 98, 101, 128
Costs of acquisition.............................................9, 17, 140, 146
Costs of sale ...................................................................31, 145
Courts............................................................ 57, 89, 91, 93, 130
Cruising expense........................... See Timber cruise expenses
Cutting as a sale or exchange... 41, 75, 76, 80, 81, 127, 139, 143
Cutting contracts .................................................41, 42, 53, 126
Cutting rights .......................................... See Cutting contracts
D
Date of disposal.......................................................... 38, 41, 42
Deduct versus capitalize ............................... 13, 15, 26, 29, 142
Deferred reforestation subaccount ....................... 105, 142, 145
Depletion deduction ..............................................13, 32, 49, 73
Depletion unit........................................................... 32, 60, 142
Depreciable land improvement account................. 12, 106, 125
Depreciation accounts..................................................106, 125
Depreciation deductions.......................12, 16, 20, 21, 22, 25, 67
Disease control expenses ...............................................25, 126
Disease, losses due to.................................... 56
Disposal with economic interest retained....38, 49, 71, 126, 127
Disposition of depreciated property...................... 25
Drought, damage due to.............................. 13, 56, 61, 62, 129
E
Easements—Also see Conservation easements ...............60, 61
Economic interest, defined.............................................38, 114
Elections by taxpayer....13, 16, 21, 22, 26, 28, 29, 38, 41, 49, 63,
72, 74, 75, 76, 79, 80, 81, 87, 91, 126, 127, 128, 139, 141
Electronic tax filing..........................................................49, 98
Employee ................................................................. 74, 76, 142
Environmental Quality Incentives Program (EQIP) ..... 44, 129
Equipment ......................... 9, 12, 13, 17, 18, 20, 51, 57, 125, 141
Equipment accounts ............................................... 13, 106, 126
Escrow accounts............................................... 71
Establishment costs.... 9, 12, 13, 31, 79, 101, 105, 125, 126, 140,
142, 145, 146
Estates ............................................. 9, 22, 26, 36, 67, 68, 69, 87
Evergreen trees, defined...................................................41, 79
Exchanges—Also see Like-kind exchanges... 10, 16, 25, 51, 63,
101, 128, 129, 144, 146
Exclusion of cost-sharing payments ... 15, 44, 47, 49, 50, 75, 98,
128
Expense accounts....................................... 106
Expenses—Also see specific item....... 25, 27, 29, 56, 62, 67, 76,
79, 84, 101, 128
Extension forester.................................................... 1
F
Fair market value ............9, 10, 42, 47, 51, 53, 56, 71, 80, 81, 87,
111, 125, 126, 127, 129, 140, 143, 144
Family limited partnerships—Also see Limited partnerships.. 8, 115
Farming ..................................................... 13, 17, 27, 71, 74, 79
Fire, losses due to...........................13, 55, 56, 62, 130, 142, 143
Fire protection expenses ................................................25, 126
Flood, losses due to................................................... 56
Forester—Also see Consulting forester and
Service forester ................................................10, 57, 77, 142
Forest Health Protection Program (FHPP) ................... 44, 129
Forest Land Enhancement Program (FLEP)...................... 44
Forestry Incentives Program (FIP)......................... 44, 126, 129
Form..............................................See specific IRS Form 1040
For profit, defined...........................................................25, 115
G
Gain or loss, how computed.......... 31, 32, 38, 41, 42, 51, 53, 56,
57, 59, 60, 62, 63, 72, 73, 128, 129, 145
General asset accounts.................................... 19
General business accounts...................................... 106
Gifts, basis of ...................................................................9, 141
Gross profit percentage...................................... 72
Growth, accounting for ............................... 10, 13, 31, 105, 142
H
Hobby-loss rule.......................... 25
Holding period ........................... 36, 37, 38, 41, 42, 51, 127, 128
Hurricane, losses due to ......................................... 56, 142, 143
I
Ice storm, losses due to ....................................................55, 56
Improvements to land ..................12, 16, 67, 106, 125, 141, 145
Independent contractor............................ 41, 42, 74, 76, 77, 143
Industry forester............................................ 1
Information returns—Also see specific return ......50, 77, 86, 87
Inherited property, basis of ...................................... 9, 141, 146
Insect control expenses ..................................................25, 126
Insects, losses due to ..................................56, 61, 62, 129, 130
Installment sales..................................................... 71, 101, 144
Insurance expenses...........................................................25, 62
Insurance, proceeds from ................................ 56, 57, 58, 59, 73
Interest............... 25, 26, 27, 28, 29, 47, 60, 72, 93, 106, 126, 128,
140, 144
Internet tax assistance.......................................... 98
Investment expenses, how to recover ........................ 28, 29, 67
Investment, property held for............................7, 19, 22, 28, 37,
51, 52, 55, 56, 62, 64, 67
Involuntary conversions...16, 25, 53, 59, 63, 64, 79, 101, 129,
142
IRC section 175 deduction...............................................13, 15
IRC section 179 deduction......................................... 18, 22, 25
IRC section 194 deduction—Also see Reforestation
incentives ........................................... 13, 15, 16, 98, 105, 146
IRC section 631(a) transaction..................37, 41, 49, 75, 76, 80,
81, 83, 126, 127, 128, 139, 143, 144
IRC section 631(b) disposal......................36, 37, 38, 49, 50, 71,
72, 75, 76, 80, 81, 126, 127, 128, 139, 144
IRC section 2032A..................................................... 27, 47, 71
IRS Form 706............................................ 69
IRS Form 1040—Also see specific Schedule.......16, 49, 64, 73,
74, 84, 94, 139
IRS Form 1040, Schedule A ...........16, 29, 58, 60, 62, 67, 73, 84
IRS Form 1040, Schedule C ....................16, 28, 38, 43, 49, 61, 62,
74, 84, 85
IRS Form 1040, Schedule D .......... 36, 37, 41, 53, 61, 64, 72, 84
IRS Form 1040, Schedule E.............................................86, 87
IRS Form 1040, Schedule F.....................16, 27, 38, 43, 49, 61, 62,
74, 76, 84, 85
IRS Form 1040, Schedule SE .................................... 74, 75, 76
IRS Form 1040-A............................................................ 94
IRS Form 1040-EZ........................................................ 94
IRS Form 1040-X................................................ 94
IRS Form 1041........................................................ 87
IRS Form 1065.................................................................74, 86
IRS Form 1065, Schedule K-1................................... 74, 86, 87
IRS Form 1099.................................................................50, 92
IRS Form 1099-G ............................................................48, 50
IRS Form 1099-MISC..................................................... 50, 77
IRS Form 1099-S.................................................... 50
IRS Form 1120............................................................. 87
IRS Form 1120-S......................................................... 87
IRS Form 2297............................................................... 91
IRS Form 2553...............................................................87, 122
IRS Form 2848............................................................... 92
IRS Form 3115.............................................................102, 126
IRS Form 4562......................................................16, 19, 22, 23
IRS Form 4684........................................................... 58, 60, 64
IRS Form 4797..............23, 38, 41, 43, 49, 53, 58, 60, 61, 62, 64,
72, 84
IRS Form 4952................................................. 29
IRS Form 6251.................................................................73, 74
IRS Form 6252.................................................. 72
IRS Form 8283................................................. 68
IRS Form 8453.................................................... 98
IRS Form 8582.................................................. 28
IRS Form 8824............................................... 53
IRS Form 8949................................................................ 37, 38
IRS Form SS-8 77
IRS Form T (Timber)—Also see specific Part........... 15, 49, 72,
98, 101
IRS Form T (Timber), Part I....................... 49
IRS Form T (Timber), Part II .................... 31, 38, 43, 49, 58, 60
IRS Form T (Timber), Part III..........................................38, 49
IRS Form T (Timber), Part IV ................................... 15, 16, 49
IRS Form T (Timber), Part V.................................... 49
IRS Form W-2..................................................................76, 92
IRS publications......................................... 97
J
Joint tenancy................................................................ 85
Journal..........................................................................102, 104
L
Land account............................................. 12, 60, 104, 125, 146
Leases...................15, 26, 47, 52, 58, 63, 67, 71, 75, 83, 106, 128
Ledger.................................................. 104
Life estate............................................ 85
Like-kind exchanges ................................. 16, 51, 101, 129, 144
Limbs, sale of.................................................................83, 127
Limited liability companies ......................................... 8, 74, 87
Limited partnerships—Also see Family limited
partnerships 86
Logging roads ................................................................21, 125
Longleaf Pine Initiative (LPI)..........See Conservation Reserve Program (CRP)
Losses.................. See Capital gains and losses, or Involuntary
conversions
Lump-sum sale of timber—Also see Outright sale of timber held for investment, and Outright sale of timber held for business use.................. 32, 37, 50, 71, 76, 80, 128, 142, 144
M
Management expenses ............................ 25, 26, 28, 67, 73, 101
Marking of timber ..........................................................31, 145
Material participation...........................27, 28, 73, 74, 75, 79, 87
Merchantable timber ......................... 32, 53, 105, 141, 142, 145
Merchantable timber subaccount ..........12, 13, 31, 32, 104, 139,
141, 145
Minimum tax...............................See Alternative minimum tax
N
Noncasualty losses .................61, 62, 63, 64, 125, 129, 130, 143
Nontimber forest products ......................................... 49, 75, 83
O
Operating expenses—Also see specific item.........25, 27, 28, 79
Ordinary income accounts..................................... 106
Ordinary income and losses ....................................... 16, 49, 83
Original basis ................................................ 9, 10, 17, 105, 140
Outright sale of timber held for business use............. 36, 38, 80
Outright sale of timber held for investment.....................36, 37
Owner, defined ....................................................37, 41, 42, 127
P
Part I.......................................See IRS Form T (Timber), Part I
Part II ................................... See IRS Form T (Timber), Part II
Part III .................................See IRS Form T (Timber), Part III
Part IV.................................See IRS Form T (Timber), Part IV
Part V ................................... See IRS Form T (Timber), Part V
Partial destruction, losses due to......................................57, 58
Partnerships............................................... 26, 28, 74, 81, 86, 93
Passive activity................................................ 26, 28, 71, 73, 79
Passive income or loss .....................................................26, 28
Passive loss rules................................26, 28, 71, 74, 79, 87, 101
Personal use, property held for ...............................7, 19, 37, 55
Plantations, losses of ......See Premerchantable timber, losses of
Plantation subaccount ............................. 12, 13, 18, 31, 58, 105
Planting expenses.................................9, 12, 13, 15, 63, 79, 125
Portfolio income...................................... 28
Precommercial thinning ....................................25, 26, 106, 142
Premerchantable timber, losses of 57
Preproductive period 79
Primarily for sale, timber held ....................... 37, 38, 51, 53, 61,
71, 76, 80, 139
Profit, defined for timber investments............................25, 120
Property taxes.....................................25, 28, 29, 67, 73, 85, 106
Pruning expenses ..............................................26, 79, 125, 142
Purchased property, basis of .................................... 9, 141, 146
Q
Qualified timber property (QTP) ........ 13, 15, 16, 106, 140, 145
Quantity of timber, determination of .... 10, 38, 41, 42, 127, 128
R
Recapture of amortization deductions......................... 16
Recapture of depreciation deductions............................. 25
Recapture of excluded cost-sharing payments.................. 49
Recapture of IRC section 179 deductions........................23, 25
Recapture of reforestation amortization deduction................ 79
Recordkeeping requirements ..............................20, 27, 97, 102
Reforestation account.....................................................15, 106
Reforestation costs ......................................See Establishment costs
Reforestation costs, amortization of ............. See Reforestation tax incentives
Reforestation costs, current deduction of...... See Reforestation tax incentives
Reforestation tax credit..................................... 13
Reforestation tax incentives............................ 13, 15, 31, 79, 98
Rental income ............................................................ 47, 71, 75
Retained economic interest—Also see Disposal with economic interest retained..................................................... 37, 38, 127
Revocation of IRC section 631(a) election..............43, 76, 144
Roads....................... 9, 12, 16, 21, 25, 63, 67, 106, 125, 126, 128
S
Sale, costs of .................................................. See Costs of sale
Sales, types of—Also see specific type ................32, 37, 38, 41,
80, 81, 83
Salvage of damaged timber.................................57, 58, 63, 143
Scaling of logs............................................... 31, 38, 42, 71, 127
Schedule A .............................See IRS Form 1040, Schedule A
Schedule C .............................See IRS Form 1040, Schedule C
Schedule D ............................ See IRS Form 1040, Schedule D
Schedule E .............................See IRS Form 1040, Schedule E
Schedule F.............................. See IRS Form 1040, Schedule F
Schedule K-1............................. See Form 1065, Schedule K-1 Section 631(a) transaction.... See IRC section 631(a) transaction Section 631(b) disposal.......... See IRC section 631(b) disposal
Self-employment tax.............................................36, 49, 74, 83
Service contract, logging ...............................................42, 142
Service forester....................... 57
Shearing expenses..........................................................79, 125
Single identifiable property (SIP) ............................12, 57, 130
Site preparation expenses...................................................9, 12
Social security self-employment tax........................... See Self- employment tax
Soil and water conservation expenses........................ 13, 44, 67
Sole ownership—Also see Sole proprietorship.............. 85
Sole proprietorship.......................................... 27, 36, 74, 85, 86
Southern Pine Beetle Prevention Program (SPBP)...See Forest
Health Protection Program (FHPP)
Special use valuation................................................ 4, 9, 27, 47
State Acres for Wildlife Enhancement (SAFE) ...................See Conservation Reserve Program (CRP)
State conservation cost-sharing payments ................. 44, 50, 75
State conservation cost-sharing programs....................... 44
Stepped-up basis ........................................................ 51, 69, 87
Stewardship Incentives Program (SIP) ..........................44, 129
Storm, losses due to—Also see Hurricane, Ice storm,
and Tornado...................................................................55, 56
Stumpage..........................................................................42, 53
Stumps ............................................................... See Tree stumps
Subchapter S corporations .................... 26, 28, 87, 93, 126, 127
T
Taxes, deductible and nondeductible ....................25, 26, 29, 73
Tax preparation software..................................................73, 98
Tenancy by the entirety 85
Tenancy in common 85
Theft losses .......................................................... 59, 62, 63, 64
Thinning expenses .................................... 25, 26, 106, 125, 142
Timber accounts ...................................... 12, 26, 31, 79, 98, 104
Timber cruise expenses .....................................31, 62, 140, 145
Timber deed .....................................................................37, 53
Timber, defined ...................................................41, 42, 79, 122
Timber owner ............................................. See Owner, defined
Timber stand improvement (TSI) expenses ........15, 26, 47, 142
Timber theft......................................................See Theft losses
Timber trespass ................................................See Theft losses
Tops, sale of ...................................................................83, 127
Tornado, losses due to............................................ 56, 142, 143
Trade or business, property held for use in ............. 7, 17, 19, 22,
23, 42, 51, 52, 53, 55, 56, 64, 67
Travel expenses........................................................ 25, 31, 106
Trees, damage to ...............................................38, 55, 130, 143
Tree stumps ....................................................................83, 127
Trusts................................................................... 22, 26, 36, 87
U
Uniform capitalization rules (UNICAP rules) ............. 9, 17, 79
V
Valuation .................. See Alternate valuation date, Special use
valuation, and Valuation date
Valuation date.................................................................. 9, 123
W
Western Bark Beetle Initiative (WBBI) ........ See Forest Health Protection Program (FHPP)
Wetlands Reserve Program (WRP)............................... 44, 129
Wildlife Habitat Incentives Program (WHIP)............... 44, 129
Wildlife habitat management ........................ 26, 44, 67, 68, 141
Wildlife habitat management expenses............................26, 67
Y
Year cut 41
Year of deduction for a casualty loss........................ 58
Year of deduction for a condemnation loss.............. 61
Year of deduction for a noncasualty loss..................62
Year of deduction for a theft loss............................... 60
Young growth, losses of...............See Premerchantable timber, losses of
Young growth subaccount............................. 12, 13, 31, 58, 105