Forest Landowners Guide to the Federal Income Tax

Tax tips for the 2016 tax year available

Image by Svilen.milev, courtesy of Wikimedia Commons.
Image by Svilen.milev, courtesy of Wikimedia Commons.

Tax tips for forest landowners for the 2016 tax year are now available online. Prepared by Linda Wang, U.S. Forest Service national timber tax specialist.

More detailed information is available through a U.S. Department of Agriculture publication, the Forest Landowners Guide to the Federal Income Tax.

Written by Forest Service Southern Research Station emeritus research forester John Greene with co-authors William Siegel, William Hoover and Mark Koontz, the guide replaced a previous publication of the same name, incorporating new tax laws and changes through September 30, 2012.

“The main purpose of this guide is to foster good management of family-owned forest land by providing an explanation of provisions and incentives related to forest ownership and management under Federal income tax law,” says Greene, who since retiring works as a volunteer for the Forest Service Southern Research Station Forest Economics and Policy unit.

The guide introduces tax planning and basic tax considerations and explains the Federal income tax as it pertains to timber and forest land, including:

  • Basis and capital accounts,
  • Reforestation tax incentives,
  • Depreciation and the Internal Revenue Code section 179 deduction,
  • Operating expenses and carrying charges,
  • The passive loss rules,
  • Sale or disposal of timber,
  • Government cost-sharing programs, and
  • Other timber-related receipts.

It also covers the tax implications of other forest-related topics, including:

  • Donation or sale of a conservation easement,
  • Installment sales,
  • The alternative minimum tax,
  • Self-employment taxes,
  • Christmas tree production, and
  • Nontimber products.

In addition, the authors discuss forms or forest land ownership, how to research tax questions, sources of tax assistance, and forest recordkeeping. The guide includes a glossary of terms, summaries of selected Internal Revenue Service (IRS) rulings, and a copy of IRS Form T (Timber): Forest Activities Schedule, with instructions and annotations.

Access the full text of the guide.

2016 Tax Year Tips for Forest Landowners.

More resources about the tax treatment of timber are available here.

For more information, email John Greene at

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