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JamisonMoneyFarmer PC
Timber Practice Group
GOALS OF THE JMF TIMBER PRACTICE GROUP
As a reputable accounting firm in West Alabama for over 90 years, JamisonMoneyFarmer PC has vast experience working with clients in the timber industry. We have made it our priority to assist our clients in understanding the complicated tax laws surrounding timber.
Understanding these laws is essential to optimizing our client’s tax situation. We work with timber mills, timber managers, timber farmers and clients that hold timber for investment to make sure they are maximizing their deductions and classifying their timber income correctly.
JMF offers tax planning, education seminars, consulting and various other services related to timber management and timber investments. Our experienced timber experts can keep you up to date on all timber-related law changes and make sure that you are optimizing your tax situation.
In light of the widespread
storm damage from the recent
Alabama Tornados, forest
owners need to be aware of
the tax rules related to
deducting losses from storm
damage and deferring taxable
income that may have arisen
from salvaged timber proceeds.
What do you need to
minimize the effect of taxes
after the loss of timber?
What do you need to claim a timber casualty loss?
1. A FORESTER to measure and document the decline in value of your timber
2. BASIS in the timber3. Proof of OWNERSHIP4. PHOTOGRAPHS of the damage5. Proof of ATTEMPT to SALVAGE
the damaged timber6. A CPA to assist you with
calculating the loss
Things to remember
• If you have NO basis (cost) in the timber you will have NO tax losses to deduct
Things to remember
• Timber casualty losses are limited to the lesser of;– Decline in fair market value, or– Timber Basis
• You can use the entire basis in a “single identifiable property” (SIP) to claim a loss up to the value of the loss. A SIP is the depletion block of timber – which varies by owner.
To Claim the Loss
• You may claim 2011 storm damage losses in the Presidentially Declared Disaster Areas on your 2010 tax return if you elect to do so.
• Timber losses may be a business casualty loss which yields better tax benefits than a personal casualty loss.
TREATMENT OF GAINSSALVAGE OR INSURANCE PROCEEDS IN EXCESS OF BASIS WILL RESULT IN A GAIN.
1. Reinvest the Gain
2. Recognize the Gain
Reinvest the Gain
• The gain can likely be deferred if you plan to reinvest the proceeds.
• If the damaged timber was in a Presidentially Declared Disaster Area, you can reinvest the proceeds in a broad range of business or investment property.
• It does not have to be timber to defer the gain.
Recognize the Gain
• It may be better to go ahead and pay the tax on capital gains.
• You can pay tax at a lesser rate on Long-Term Capital Gains
• Be able to deduct reforestation expenses at higher ordinary income rates.
The JMF Timber Practice Group is available to assist you with your timber tax issues as well as your
Estate Planning needs.• Check us out at www.jmf.com and look for the
Timber Industry page.• Contact us at 205-345-8440
Our Timber Practice Team• Rick Gibson, CPA
• Carl Jamison, CPA– [email protected]
• Janet Moore, CPA– [email protected]
• Danny Roberts, CPA– [email protected]
• Chris Williams, CPA– [email protected]
• Kristen Roberts, CPA– [email protected]
• Ashley Johnson, CPA– [email protected]
• Rachel Aaron, CPA– [email protected]
• Angela Hamiter, CPA– [email protected]
• Dick Miles, CPA– [email protected]
• Cathy Rice, CPA– [email protected]
• Kristi Moore, CPA– [email protected]
• Orman Wilson, CPA– [email protected]
• Rachel Taylor, CPA– [email protected]
• Josh Taylor, CPA– [email protected]
JamisonMoneyFarmer PC
Timber Practice Group
