The Forest Landowners Guide to the Federal Income Tax

Figure 15-2. Evergreen Tree Farm: Land Account

Date Accounts and Explanation Ref. Debits Credits
$ $
06/21/06 Allocation of Evergreen Tree Farm purchase cost to land: John Jones Tract (Table 15-3) 5 59,537
09/15/11 Allocation of Lonesome Pine purchase cost to land 27 60,998
09/15/11 Adjusted balance (basis) carried forward 120,535

Figure 15-3. Evergreen Tree Farm: Merchantable Sawtimber Subaccount - Volume Basis*

Date Accounts and Explanation Ref. Debits Credits
$ $
06/21/06 Estimated merchantable volume of pine and hardwood sawtimber at date of purchase (see Evergreen T.F. cruise in Table 15-2) 6b 650
01/02/08 Growth for 2006-08 (2 years: see cruise report, Table 15-2) 80
01/02/08 Adjusted volume carried forward 730
12/31/08 Volume removed in sale 18b 438
12/31/08 Adjusted volume carried forward 292
09/15/11 Estimated volume on Lonesome Pine tract when purchased (Table 15-2) 28b 750
09/31/11 Adjusted volume carried forward 1,042

* See fig. 15.6 for corresponding value.

Figure 15-4. Evergreen Tree Farm: Young-Growth Subaccount

Date Accounts and Explanations Ref. Debits Credits
$ $
06/21/06 Allocation of Evergreen Tree Farm purchase cost to young growth (60 acres of pine, see Table 15-3) 8 22,323
09/15/11 Allocation of Lonesome Pine purchase cost to young growth (40 acres, see Table 15-3) 29 16,256
09/31/11 Transfer young growth to Merchantable Pulpwood Subaccount (value); volume estimated (cruised) to be 1,350 cords by E.Z. Cruiser 30 22,323
09/31/11 Adjusted balance carried forward 16,256
12/31/11 Election to capitalize carrying costs, proportional allocation 35 602
12/31/11 Adjusted balance carried forward 16,858