The Forest Landowners Guide to the Federal Income Tax

Figure 15-5. Evergreen Tree Farm: Depreciable Land Improvement Account

Date	Accounts and Explanation	Ref.	Debits	Credits
			($)	($)
06/21/06	Allocation of Evergreen Tree Farm purchase cost to equipment, a 90-foot wooden bridge (Table 15-3)	9	13,399
12/31/06	Depreciation deduction for 2006 (Straight line: ($13,399 / 15) x 7/12 months)	10		521
12/31/06	Adjusted balance carried forward (Subsequent depreciation entries are not shown)		12,878

Date	Accounts and Explanation	Ref.	Debits	Credits
			($)	($)
06/21/06	Allocation of Evergreen Tree Farm purchase cost to merchantable timber	6a	161,834
12/31/08	Allowable as basis for sale	18a		97,100
12/31/08	Adjusted basis carried forward		67,734
09/15/08	Allocation of Lonesome Pine purchase to timber (Table 15-1)	28a	314,036
09/15/11	Adjusted basis carried forward		378,770
12/31/11	Election to capitalize carrying charges	35	14,041
12/31/11	Adjusted basis carried forward		392,811