The Forest Landowners Guide to the Federal Income Tax

Index

Index

A

Accounting methods 111
Accounts-also listed by name 23, 112-114
Active income or loss 40
Ad valorem taxes-also see Property taxes 17, 38, 42
Adjusted basis 21, 45
Administrative law 99-100
Afforestation expenses 21, 26, 28, 29, 113
Afforestation expenses, amortization of 28, 113
Agricultural conservation program (ACP) cost-share payments 55, 88
Allocation of basis 4, 22
Allocation of costs 22
Allowable basis 45, 46, 69, 84
Alternate valuation date 21
Alternative minimum tax 85–86
Amortization 26, 28, 59, 61, 83, 91, 113
Appeals 104
Audits 102-104

B

Basis 21, 45, 65, 69, 139-140
Brush control 25, 140
Business expenses, how to recover 5, 38, 40, 41, 42, 72, 91
Business versus hobby 13

By-products 61, 87

C

C corporations 26, 40, 41, 42, 96
Capital accounts 21, 23, 112-113
Capital asset 21, 23, 52
Capital gains and losses 51, 52, 53, 55, 92,140-143
Capital income accounts 113
Capitalization 21, 39, 42, 112
Capitalize versus deduct 21, 25, 26, 39
Carrying charges-also see specific item 38, 39, 40, 41, 42, 91
Case law 100-102
Casualty losses 67-70
Chips 61, 87
Christmas trees, as timber 55, 91
Christmas trees, expenses of producing 91, 139
Christmas trees, income from 92, 141
Community property 95
Condemnations 71-72, 73. 74
Conservation easements 79-81
Conservation Reserve Program (CRP) cost-share payments 25, 59, 88
Consulting forester 13, 38, 45, 56, 69 -
Contract right to cut versus service contract 55
Co-ownership 95
Corporations 26, 40, 41, 42, 96
Cost–also see specific items 21, 38, 45, 91
Courts 101, 102
Cruising expense 23, 45, 72
Cuffing as a sale or exchange 55, 92
Cuffing contracts 53, 55, 66
Cutting rights 53, 55, 66, 140–141

D

Date of disposal 55
Depletion deduction 6, 21, 45, 46, 55, 68, 69,70, 72, 84, 93, 139
Depreciable land improvement account 23
Depreciation accounts 113
Depreciation expenses 29, 113
Disease control expenses 38
Disposal with a retained economic interest 53, 92, 105
Disposition of depreciated property 38
Drought, damage due to 3, 68, 70

E

Economic decision criteria 6, 7
Economic interest, defined 53
Elections by taxpayer 21,28,29,30,31,32,35,39, 42, 43, 55, 56, 73, 74, 84, 87, 88, 91, 92
Employee 89-90
Environmental Quality Incentives Program (EQIP) cost-share payments 58, 88, 140
Equipment 21, 25, 26, 30, 31, 70
Equipment accounts 26, 113
Escrow Accounts 84
Estates 14,18,21,26,35,40,50,79,80,81,97
Evergreen trees, defined 55, 91
Exchanges 22, 28, 63-66, 72, 143
Expense accounts 113

F

Fair market value 21, 22, 55, 56, 59, 63, 65, 70, 72, 73, 83, 84, 92
Farming 25, 29, 41, 83, 91
Fire protection expenses 17, 38
Fire, losses due to 67, 68, 72
For profit, defined 39
Forest products 3, 61, 87
Forester 13, 14, 16, 22, 38, 45
Forestry Incentives Program (FIP) cost-share payments 55, 88, 140
Form 1040 18, 28, 60, 95, 104
Form 1040 A 104
Form 1040 EZ 104
Form 1040 X 104
Form 1065 87
Form 1099 60, 61, 90, 103
Form 2297 101
Form 2553 97
Form 2848 103
Form 3468 29
Form 4255 29
Form 4562 28, 32, 35, 36
Form4684 73,74
Form 4797 36, 53, 55, 57, 61, 66, 74, 84
Form 4952 43
Form 6251 85,86
Form 6252 83,84,85
Form 8283 81
Form 8582 42
Form 8824 66
Form SS-8 90
Form T 53, 85, 111, 145
Form W-2 89, 103

G

Gain or loss, how computed 45, 50, 55, 68,72, 73
General business accounts 114
Gifts, basis of 22
Gross profit percentage 83
Growth, accounting for 26, 45, 113

H

Hobby versus business 13
Holding period 1,50,51,55,56,63
Hurricanes, losses due to (See Windstorms)

I

Ice storm, losses due to 72
Improvements to land 23, 29, 112
Independent contractor 53, 56, 89–90
Information returns 60, 61, 90, 103
Inherited property, basis of 21
Insect protection expenses 38
Insects, losses due to 4, 67, 68, 72
Installment sales 83–85
Insurance expenses 38
Insurance, proceeds from 67, 68, 69, 70, 71, 73,
Interest 4, 6, 7, 9, 11, 21, 38, 39, 41, 42, 83, 85, 86, 103, 114
Investment expenses, how to recover 42–43
Investment tax credit 26, 29, 40, 42, 59, 61, 91
Investment, property held for 13, 17, 42, 52, 61, 63, 64, 67, 73, 74, 79
Involuntary conversions 67–77, 143–144

J

Joint tenancy 95
Journal 112, 114, 115, 116–118

L

Land account 23, 71, 112
Leases 5, 17, 28, 39, 59, 64, 72, 79, 83, 87, 114
Ledger 112
Life estate 95
Like-kind exchanges 28, 63–66, 143
Limbs, sale of 61
Limited liability companies 18, 86, 97
Limited partnership 96
Logging roads 21, 23, 29, 35, 112, 113
Losses (See Capital gains and losses, or Involuntary conversions)
Lump-sum sale 46, 51, 52–53, 61, 72, 83, 88, 92

M

Management expenses–also see specific expense 5,13, 16, 17, 25, 26, 28, 29, 31, 38, 39, 40, 41, 42, 43, 45, 70, 72, 79, 85, 91, 113
Marking of timber 45, 52
Material participation 17, 40–41, 85, 91, 97, 112
Merchantable timber 4, 25, 26, 28, 45,65, 66, 68, 69, 72, 113
Minimum tax 8 5-86

N

Non-business expenses, recovery of 13, 17
Noncasualty losses 67, 68, 70, 73, 74

0

Operating expenses–also see specific item 38, 91
Ordinary income 5, 16, 17, 28, 38, 45, 50,51, 53, 55, 61, 71, 74, 83, 87, 88, 91, 105, 114
Ordinary income accounts 114
Original basis 21
Outright sale of timber 51, 52–53, 61, 72, 83, 88, 92
Owner, defined 53, 56

P

Partial destruction, losses due to 70, 72
Partnerships 18, 26, 40, 63, 86, 87, 92, 96, 104
Passive activity 17, 40, 41, 83, 85, 91
Passive income or loss 40, 41, 42
Personal use, property held for 17, 50, 52, 56, 67, 74
Plantation subaccount 25, 26, 28, 45, 70, 113
Planting expenses 4, 21, 25, 26, 28,29, 72, 91, 113
Portfolio income 41
Precommercial thinning 38, 39, 113
Preproductive period 16, 91
Primarily for sale, timber held 30, 51, 53, 66, 74, 88, 92, 105
Profit, defined for timber investments 17, 39
Property taxes 16, 17, 38, 39, 42, 86, 113
Pruning expenses 91 Purchased property, basis of 21

Q

Quantity of timber, determination of 55

R

Recordkeeping requirements 35, 41, 108, 112
Reforestation expenses 15, 21, 26, 28, 29, 58,59, 61, 91, 113
Reforestation expenses, amortization of 26, 28,59, 61, 83, 91, 113
Reforestation tax credit 26, 29, 40, 42, 59, 61, 91
Rental income 59, 83, 87, 88
Retained economic interest 51, 53, 92
Revocation of election under Section 631(a) 56
Roads 21, 23, 29, 35, 38, 112, 113

S

S corporations 18, 26, 40, 97, 104, 108
Sale, costs of 21, 45, 83, 84, 114
Sales, types of 46, 51, 52–53, 53–55, 55–57, 91
Salvage of damaged timber 68, 70, 72, 73
Scaling of logs 45, 53, 83
Schedule A, Form 1040 28, 43, 74, 85
Schedule B, Form T 23
Schedule C, Form 1040 18, 28, 41, 53, 57, 60, 74, 95
Schedule C, Form T 73
Schedule D, Form 1040 52, 53, 66, 74, 84, 86
Schedule D, Form T 73
Schedule E, Form 1040 18, 74, 96, 97
Schedule E, Form T 28
Schedule F, Form 1040 18, 28, 41, 53, 57,61, 74, 88, 95
ScheduleF, Form T 45, 56, 57, 73
Schedules SE 87, 88
Schedules K-1 87
Section 175 deduction 25
Section 179 deduction 29, 31, 35–37, 38
Section 631 (a) transaction 46, 51, 55–57, 61, 72, 73, 87, 88, 92, 94
Section 631(b) disposal 46, 51, 53–55, 61, 72, 83, 84, 87, 92, 94
Section 2032A 41
Self-employment tax 16, 51, 61, 86–88, 107
Selling expenses 21, 45, 83, 84, 114
Service forester 69
Shearing expenses 91
Site preparation expenses 4, 21, 25
Social Security tax–also see Self-employment tax 86-88
Soil and water conservation expenses 25, 59, 88
Sole ownership proprietorship 17, 51, 86, 95, 96
Special use valuation 14, 21, 41, 59
State conservation program cost-share payments 58, 60, 88
Stewardship Incentives Program (SIP) cost-share payments 58, 59, 88, 140
Stumpage 6, 56, 57, 65
Stumps 61, 143
Subchapter S corporations 18, 26, 40, 97, 104, 108

T

Taxes, deductible and nondeductible 17, 38, 39, 41, 42, 86
Tenancy by the entirety 95
Tenancy in common 95
Theft, losses from 67, 71, 72, 73
Thinning expenses 38, 39, 113
Timber accounts 13, 25, 26, 39, 45, 50, 68, 70, 91, 113
Timber cruise expenses 23, 46 Timber owner 53, 56
Timber stand improvement (TSI) expenses 1, 8, 26, 39, 58
Timber, defined 53, 91
Timeline 7
Tops, sale of 55, 61
Tornado, losses due to (See Windstorms)
Trade or business, held for use in 17, 18, 31, 35, 36, 38, 40, 41, 51, 52, 53, 55, 56, 63, 64, 67, 74, 79, 86, 87, 88, 92, 105
Travel expense 38, 45, 107, 113
Tree stumps 61, 143
Trees, damage to 53, 67–77
Trusts 14, 18, 26, 35, 40, 97

U

Uniform capitalization rules 21, 30, 91

V

Valuation 16, 22, 80
Valuation date 21

W

Wetlands Reserve Program (WRP) cost-share payments 58, 88, 140
Wildlife Habitat Incentives Program (WHIP) cost-share payments 58, 88, 140
Wildlife habitat management 4, 39, 58, 79, 80, 88 Wildlife habitat management expense 39, 79, 88
Windstorms, losses due to 67, 68, 72

X

Y

Year of cutting 55 Year of deduction for casualty loss and theft 69, 71
Young growth, losses of 70, 72
Young growth subaccount 25, 26, 28, 45, 70

Z