Understanding Timber Taxation (2 hours - afternoon) - NEW! - Webcast

Overview

If you have clients who own forestland, this course is for you! In this session you will learn the unique terminology associated with forestry activities, and the various tax provisions that are unique to forestry included in IRC 263A, 1221, 1231, 631(a) and (b), 1012, 1016, and 611. You will learn how to account for depletion, the tax treatment for the sale of standing timber and logs, how to deduct road building costs and reforestation, the impact of the hobby loss rules, taxation of cost share payments, filling out Form T, and how the classification of your taxpayer drives how their timber activities are taxed.

Highlights

• Overview of timber and forestland taxation fundamentals
• Key forestry terminology for tax practitioners
• Classification of timber owners (personal use, investor, farm, hobby, passive/active business) and tax implications of each classification
• Capital vs. ordinary income treatment in timber activities
• IRC §631(a) and §631(b): treatment of standing timber sales and cutting elections
• Application of IRC §§1221 and 1231 to timber transactions
• Basis determination and adjustments (IRC §§1012 and 1016)
• Timber depletion rules and calculations (IRC §611)
• Uniform capitalization rules and IRC §263A considerations
• Deductibility of road building and reforestation costs
• Tax treatment of reforestation expenditures and amortization
• Taxation of cost-share and conservation payments
• Hobby loss rules and passive activity considerations
• Reporting timber activities on Form T (Forest Activities Schedule)
• Practical examples and compliance considerations for timber owners

Prerequisites

Basic understanding of individual taxation

Designed For

CPAs & Tax Professions who have clients that own forestland.