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Forest Landowners Federal Tax Guide Forest Landowners Federal Tax Guide on CD Works with Windows, Mac, Unix, Linux and others. We find the search feature especially helpful. Search the entire document for a word, phrase or part of a word. Forest Landowners Federal Tax Guide Chapter 1. Introduction Purpose.1 New Information.1 Internal Revenue Service Review .2 Chapter 2. Timber Investment Considerations Characteristics of a Timber Investment .3 Risk .3 Investment Expenditures .4 Land.4 Merchantable Timber .4 Operating and Management Expenses .5 Investment Revenues.5 Timber Sales .5 Hunting Leases .5 Miscellaneous Revenues .5 Economic Considerations.5 General Economic Trends .6 Economic Decision Criteria .6 Net Present Value (NPV) .6 Benefit/Cost Ratio (B/C) .6 Internal Rate of Return (IRR).7 Equal Annual Equivalent (EAE) .7 Timeline .7 A Forest Investment Example .8 Summary.11 Chapter 3. Tax Planning The Planning Team.13 Developing Integrated Plans .13 Introduction.13 Advantages of Timber Investments.13 Estate Planning Role .14 Planning Implications .14 Substantial Initial Investment.14 Long Preproductive Period.16 Tax Considerations When Forest Land Is Acquired .16 Tax Considerations When Selling Timber.16 Chapter 8. Casualties, Thefts, and Condemnations Discussion Limited to “Timber” .67 Normal Losses Not Deductible.67 Noncasualty Losses.67 Casualty Losses .67 Disease or Insect Infestation .68 Drought Loss .68 Combinations of Factors .68 Salvage Requirement.68 Determining the Amount of Deductible Loss.68 Determining Volume of Timber Destroyed.68 Determining Basis of Timber Destroyed .69 Year of Deduction .69 Destruction of Unmerchantable Timber .70 Buildings and Equipment .70 Determining the Decrease in Fair Market Value.70 Theft Losses.71 Year Deducted .71 Reduce Theft Loss by Anticipated Recovery.71 Multiple Damages .71 Condemnations .71 Condemnations for Right-of-Way Easements.71 Basis for Figuring Gain or Loss .72 Recovery of Expenses.72 Casualties and Thefts .72 Condemnations.72 Postponing Gains from Involuntary Conversions .72 Determining the Gain.73 Requirements to Postpone Gain.73 Basis of Replacement Property.73 Reporting Gains and Losses From Casualties, Thefts, Condemnations, and Noncasualty Losses.73 Casualties and Thefts .73 Reporting Gain or Loss-Property Held for 1 Year or Less.74 Reporting Gain or Loss-Property Held for More than 1 Year.74 Reporting Gain or Loss From Income- Producing Property.74 Condemnations.74 Property Held for 1 Year or Less.74 Business or Investment Property Held for More Than 1 Year.74 Property Held Primarily for Sale .74 Property Held for Personal Use.74 Noncasualty Losses .74 Chapter 11. Christmas Tree Production General Considerations.91 Treatment of Costs.91 Establishment Costs .91 Operating Expenses and Carrying Charges.91 Uniform Capitalization Rules .91 Treatment of Income.92 Christmas Tree Sales Income .92 Section 1221 .92 Section 631(b).92 Section 631(a) .92 Choose and Cut Operations .92 Chapter 13. Researching a Tax Question and Appeals Procedures Statutory Law .99 Administrative Law.99 Revenue Rulings.100 Revenue Procedures.100 Chief Counsel’s Memoranda.100 News Releases, Notices, and Announcements .100 Private Letter Rulings.100 Technical Advice Memoranda .100 Case Law.100 Federal Court System.101 Tax Court.101 District Courts and Claims Court.101 Circuit Courts of Appeals .101 U.S. Supreme Court .102 viii Interpreting Case Law .102 Audits and Appeals.102 How Returns Are Selected for Examination.102 The Examination Process.103 If You Agree.103 If You Do Not Agree .103 How to Stop Interest from Accruing .103 Appeals Within the IRS.104 Appeals to the Courts .104 Claims for Refund .104 Additional Information.105 Integrated Example of Tax Research.105 Chapter 14. Sources of Tax Assistance IRS Publications .107 Commercial Tax Services.108 The Internet.108 Current Developments.108 Guidebooks.109 Table 5-1. Recovery periods under the MACRS General Depreciation System (GDS) and Alternative Depreciation System (ADS) for types of property commonly associated with forest operations. .30 Table 5-2. Prescribed and accepted alternative depreciation methods for property, by GDS recovery period. .32 Table 5-3. 200 percent declining balance depreciation rates for nonfarm property with 3-, 5-, 7-, 10-, 15-, and 20-year GDS recovery periods using the half-year convention.33 Table 5-4. 200 percent declining balance depreciation rates for nonfarm property with 3-, 5-, 7-, 10-, 15-, and 20-year GDS recovery periods using the mid-quarter convention for property placed in service in the fourth quarter.34 Table 5-5. Straight line depreciation rates for nonresidential real property with a 39-year recovery period using the mid-month convention .34 Table 5-6. Maximum amounts deductible under Section 179, by year .36 List of Tables Figure 2-1. Timeline for a timber investment, shown on a per-acre basis in 1998 dollars.7 Figure 3-1. Timing of investment, annual management expenses, and harvest revenues, per acre. .15 Figure 5-1. Schedule B of Form T (Timber): Acquisitions.24 Figure 5-2. Schedule F of Form T (Timber): Capital Returnable Through Depletion.27 Figure 6-1. Schedule F of Form T (Timber): Capital Returnable Through Depletion.47 Figure 6-2. Schedule C of Form T (Timber): Profit or Loss From Land and Timber Sales.48 Figure 6-3. Schedule F of Form T (Timber): Capital Returnable Through Depletion.49 Figure 6-4. Schedule D of Form 1040: Capital Gains & Losses. .54 Figure 8-1. Schedule F of Form T (Timber): Capital Returnable Through Depletion.76 Figure 8-2. Schedule F of Form T (Timber): Capital Returnable Through Depletion.77 Figure 15-1. Evergreen Tree Farm: Journal.116 Figure 15-2. Evergreen Tree Farm: Land Account. .119 Figure 15-3. Evergreen Tree Farm: Merchantable Sawtimber Account-Volume Basis. .119 Figure 15-4. Evergreen Tree Farm: Young-growth Subaccount. .119 Figure 15-5. Evergreen Tree Farm: Depreciable Land Improvement Account.121 Figure 15-6. Evergreen Tree Farm: Merchantable Sawtimber Account-Cost Basis. .121 All material in Adobe PDF format. Easy to use search and print functions. -No personal checks. Personal checks will be returned. -Pennsylvania residents must pay sales tax. (please look at our rules and privacy policy) |
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