{"id":3588,"date":"2018-09-04T17:30:21","date_gmt":"2018-09-04T17:30:21","guid":{"rendered":"https:\/\/nationalland.com\/blog\/?p=3588"},"modified":"2023-03-14T16:20:24","modified_gmt":"2023-03-14T20:20:24","slug":"tax-basis-importance","status":"publish","type":"post","link":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/","title":{"rendered":"Why is a Tax Basis Important for Timber Properties?"},"content":{"rendered":"

This is part 4 of a 5 part series on timber.<\/p>\n

In\u00a0part 1<\/a>, we looked at some of the factors that affect timber value, and in\u00a0part 2<\/a>\u00a0we reviewed how foresters assess timber on a property. The\u00a03rd part<\/a>\u00a0looked at Timber Management Plans and Present Use Value.<\/p>\n

In part 4, we continue to focus on potential tax advantages by looking at why buyers and investors should establish a tax basis when they buy land with timber.<\/p>\n

ESTABLISHING A TAX BASIS<\/strong><\/p>\n

When purchasing land with timber, there is value in both the land and in the timber stand. Landowners can sell the timber and retain the land to grow trees again. Establishing a tax basis allows the buyer to establish and record an estimated value of the timber at the time of purchase.<\/p>\n

Later, when the timber is harvested, that previously established value can be used to reduce the total income produced by the harvest. It may also allow a deduction of a loss if the timber is stolen or destroyed. Let’s look at some simple examples.<\/p>\n

EXAMPLE\u00a01: TIMBER IS SOLD<\/strong><\/p>\n

An investor buys 25 acres of forestland and has a licensed forester<\/a> perform a cruise and create a timber management plan. The forester estimates the value of the timber at $1,000\/acre at the time of purchase for a total of $25,000 in timber. In 7 years, the owner notices that hardwood prices are up and many of the trees have grown from pulpwood into sawtimber, so he or she then decides it time to sell the timber. That logging produces an income of $2,000\/acre, and the owner is paid $50,000.<\/p>\n

Since the owner has a tax basis showing that the value of the timber when he or she purchased it was $25,000, the taxable amount from the sale is $25,000 instead of the entire $50,000. The landowner may also be able to deduct additional costs for managing the timberland such as the forester’s fees, costs to maintain the health of the forest, etc.<\/p>\n

EXAMPLE 2: TIMBER IS LOST<\/strong><\/p>\n

That same investor has 25 acres with timber valued at $1,000\/acre at the time of purchase. The following year, a forest fire burns 10 acres of the property, and all the trees are lost. The investor may be able to claim a loss of $10,000 on the investment on their taxes due to the fire and would leave a total remaining tax basis on the property of $15,000 for future use.<\/p>\n

CONCLUSION<\/strong><\/p>\n

This is a complex issue with many variables. When acquiring woodlands, it is essential to consult with an accountant, attorney, forester and many other professionals to ensure that you have a plan in place to leverage tax advantages of ownership.<\/p>\n

Additional information on this topic can also be found from the USDA<\/a> Forest Service.<\/p>\n

I help my clients understand land and provide them with education and knowledge to make informed decisions.\u00a0\u00a0If you’re looking for a professional land broker or need help understanding land issues like this, let me know! Pat Snyder,\u00a0p<\/a>snyder@nationalland.com<\/a>,\u00a0www.nationalland.com.<\/a><\/p>\n

Disclaimer: This is not intended to be tax or investment advice by the author or National Land Realty. You should consult your accountant and\/or investment advisor before making any decisions regarding taxes or investments.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

This is part 4 of a 5 part series on timber. In\u00a0part 1, we looked at some of the factors that affect timber value, and in\u00a0part 2\u00a0we reviewed how foresters assess timber on a property. The\u00a03rd part\u00a0looked at Timber Management Plans and Present Use Value. In part 4, we continue to focus on potential tax … <\/p>\n

Continue reading “Why is a Tax Basis Important for Timber Properties?”<\/span><\/a><\/p>\n","protected":false},"author":51,"featured_media":3590,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[9],"tags":[309,170,430],"jetpack_publicize_connections":[],"yoast_head":"\nWhy is a Tax Basis Important for Timber Properties? - National Land Realty News<\/title>\n<meta name=\"description\" content=\"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why is a Tax Basis Important for Timber Properties? - National Land Realty News\" \/>\n<meta property=\"og:description\" content=\"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\" \/>\n<meta property=\"og:site_name\" content=\"National Land Realty News\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/nationallandrealty\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/landinwnc\" \/>\n<meta property=\"article:published_time\" content=\"2018-09-04T17:30:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-14T20:20:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/nationalland.com\/blog\/wp-content\/uploads\/2018\/09\/TaxBasis_header-e1628784406317.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1256\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Pat Snyder\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@ThisIsYourLand\" \/>\n<meta name=\"twitter:site\" content=\"@ThisIsYourLand\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Pat Snyder\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\"},\"author\":{\"name\":\"Pat Snyder\",\"@id\":\"https:\/\/nationalland.com\/blog\/#\/schema\/person\/447ff3da0b9d3dd2d5f40adda99412e8\"},\"headline\":\"Why is a Tax Basis Important for Timber Properties?\",\"datePublished\":\"2018-09-04T17:30:21+00:00\",\"dateModified\":\"2023-03-14T20:20:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\"},\"wordCount\":538,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/nationalland.com\/blog\/#organization\"},\"keywords\":[\"taxes\",\"Timber\",\"timber management plan\"],\"articleSection\":[\"Timberland\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\",\"url\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\",\"name\":\"Why is a Tax Basis Important for Timber Properties? - National Land Realty News\",\"isPartOf\":{\"@id\":\"https:\/\/nationalland.com\/blog\/#website\"},\"datePublished\":\"2018-09-04T17:30:21+00:00\",\"dateModified\":\"2023-03-14T20:20:24+00:00\",\"description\":\"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.\",\"breadcrumb\":{\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/nationalland.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why is a Tax Basis Important for Timber Properties?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/nationalland.com\/blog\/#website\",\"url\":\"https:\/\/nationalland.com\/blog\/\",\"name\":\"National Land Realty Blog\",\"description\":\"News, insights and information on buying and selling land\",\"publisher\":{\"@id\":\"https:\/\/nationalland.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/nationalland.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/nationalland.com\/blog\/#organization\",\"name\":\"National Land Realty\",\"url\":\"https:\/\/nationalland.com\/blog\/\",\"sameAs\":[\"http:\/\/www.instagram.com\/nationallandrealty\",\"https:\/\/www.linkedin.com\/company\/2448696\/\",\"http:\/\/www.youtube.com\/nationallandrealty\",\"https:\/\/www.facebook.com\/nationallandrealty\/\",\"https:\/\/twitter.com\/ThisIsYourLand\"],\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/nationalland.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2017\/07\/3Color_Small_Final.png?fit=324%2C180&ssl=1\",\"contentUrl\":\"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2017\/07\/3Color_Small_Final.png?fit=324%2C180&ssl=1\",\"width\":324,\"height\":180,\"caption\":\"National Land Realty\"},\"image\":{\"@id\":\"https:\/\/nationalland.com\/blog\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/nationalland.com\/blog\/#\/schema\/person\/447ff3da0b9d3dd2d5f40adda99412e8\",\"name\":\"Pat Snyder\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/nationalland.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2018\/02\/SnyderHeadshot.jpg?fit=72%2C96&ssl=1\",\"contentUrl\":\"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2018\/02\/SnyderHeadshot.jpg?fit=72%2C96&ssl=1\",\"caption\":\"Pat Snyder\"},\"description\":\"Pat (he\/him\/his) is a retired U.S. Air Force officer, active Rotarian, and manages Western NC land brokerage for National Land Realty. Clients hire him to help them navigate difficult land transactions, which he does through a consultative team approach. This includes research, analysis, and collaboration with trusted vendors and experts, all executed with skillful project management to keep transactions on schedule. Pat was ranked #9 out of over 21,132 regional REALTORs in total Land Sales for 2021 and ranked #12 in the nation for National Land Realty brokers that year. For Seller Clients: Pat invests in every client with unmatched national advertising tailored to appeal to the most likely buyers with a team of professionals who ensure properties have the best exposure. For Buyer Clients: He devotes time to educating and empowering them to make decisions based on market trends, conservation, timber, land use, legal concerns, and other factors important to land buyers. Pat is a Certified Negotiations Expert, REALTOR Land Institute Member, and on the board of directors of the Rotary Club of Asheville and EcoForesters (a non-profit focused on sustainable forestry practices and protecting the native Appalachian landscape). View Pat's Listings and Reviews on NationalLand.com\",\"sameAs\":[\"https:\/\/nationalland.com\/pat-snyder\",\"https:\/\/www.facebook.com\/landinwnc\"],\"url\":\"https:\/\/nationalland.com\/blog\/author\/pat-snyder\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why is a Tax Basis Important for Timber Properties? - National Land Realty News","description":"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/","og_locale":"en_US","og_type":"article","og_title":"Why is a Tax Basis Important for Timber Properties? - National Land Realty News","og_description":"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.","og_url":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/","og_site_name":"National Land Realty News","article_publisher":"https:\/\/www.facebook.com\/nationallandrealty\/","article_author":"https:\/\/www.facebook.com\/landinwnc","article_published_time":"2018-09-04T17:30:21+00:00","article_modified_time":"2023-03-14T20:20:24+00:00","og_image":[{"width":1256,"height":800,"url":"https:\/\/nationalland.com\/blog\/wp-content\/uploads\/2018\/09\/TaxBasis_header-e1628784406317.jpg","type":"image\/jpeg"}],"author":"Pat Snyder","twitter_card":"summary","twitter_creator":"@ThisIsYourLand","twitter_site":"@ThisIsYourLand","twitter_misc":{"Written by":"Pat Snyder","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#article","isPartOf":{"@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/"},"author":{"name":"Pat Snyder","@id":"https:\/\/nationalland.com\/blog\/#\/schema\/person\/447ff3da0b9d3dd2d5f40adda99412e8"},"headline":"Why is a Tax Basis Important for Timber Properties?","datePublished":"2018-09-04T17:30:21+00:00","dateModified":"2023-03-14T20:20:24+00:00","mainEntityOfPage":{"@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/"},"wordCount":538,"commentCount":0,"publisher":{"@id":"https:\/\/nationalland.com\/blog\/#organization"},"keywords":["taxes","Timber","timber management plan"],"articleSection":["Timberland"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/nationalland.com\/blog\/tax-basis-importance\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/","url":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/","name":"Why is a Tax Basis Important for Timber Properties? - National Land Realty News","isPartOf":{"@id":"https:\/\/nationalland.com\/blog\/#website"},"datePublished":"2018-09-04T17:30:21+00:00","dateModified":"2023-03-14T20:20:24+00:00","description":"In this article, we look at why buyers and investors should establish a tax basis when they buy land with timber.","breadcrumb":{"@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/nationalland.com\/blog\/tax-basis-importance\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/nationalland.com\/blog\/tax-basis-importance\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/nationalland.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Why is a Tax Basis Important for Timber Properties?"}]},{"@type":"WebSite","@id":"https:\/\/nationalland.com\/blog\/#website","url":"https:\/\/nationalland.com\/blog\/","name":"National Land Realty Blog","description":"News, insights and information on buying and selling land","publisher":{"@id":"https:\/\/nationalland.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/nationalland.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/nationalland.com\/blog\/#organization","name":"National Land Realty","url":"https:\/\/nationalland.com\/blog\/","sameAs":["http:\/\/www.instagram.com\/nationallandrealty","https:\/\/www.linkedin.com\/company\/2448696\/","http:\/\/www.youtube.com\/nationallandrealty","https:\/\/www.facebook.com\/nationallandrealty\/","https:\/\/twitter.com\/ThisIsYourLand"],"logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/nationalland.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2017\/07\/3Color_Small_Final.png?fit=324%2C180&ssl=1","contentUrl":"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2017\/07\/3Color_Small_Final.png?fit=324%2C180&ssl=1","width":324,"height":180,"caption":"National Land Realty"},"image":{"@id":"https:\/\/nationalland.com\/blog\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/nationalland.com\/blog\/#\/schema\/person\/447ff3da0b9d3dd2d5f40adda99412e8","name":"Pat Snyder","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/nationalland.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2018\/02\/SnyderHeadshot.jpg?fit=72%2C96&ssl=1","contentUrl":"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2018\/02\/SnyderHeadshot.jpg?fit=72%2C96&ssl=1","caption":"Pat Snyder"},"description":"Pat (he\/him\/his) is a retired U.S. Air Force officer, active Rotarian, and manages Western NC land brokerage for National Land Realty. Clients hire him to help them navigate difficult land transactions, which he does through a consultative team approach. This includes research, analysis, and collaboration with trusted vendors and experts, all executed with skillful project management to keep transactions on schedule. Pat was ranked #9 out of over 21,132 regional REALTORs in total Land Sales for 2021 and ranked #12 in the nation for National Land Realty brokers that year. For Seller Clients: Pat invests in every client with unmatched national advertising tailored to appeal to the most likely buyers with a team of professionals who ensure properties have the best exposure. For Buyer Clients: He devotes time to educating and empowering them to make decisions based on market trends, conservation, timber, land use, legal concerns, and other factors important to land buyers. Pat is a Certified Negotiations Expert, REALTOR Land Institute Member, and on the board of directors of the Rotary Club of Asheville and EcoForesters (a non-profit focused on sustainable forestry practices and protecting the native Appalachian landscape). View Pat's Listings and Reviews on NationalLand.com","sameAs":["https:\/\/nationalland.com\/pat-snyder","https:\/\/www.facebook.com\/landinwnc"],"url":"https:\/\/nationalland.com\/blog\/author\/pat-snyder\/"}]}},"jetpack_featured_media_url":"https:\/\/i0.wp.com\/nationalland.com\/blog\/wp-content\/uploads\/2018\/09\/TaxBasis_header-e1628784406317.jpg?fit=1256%2C800&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p7sjRT-VS","_links":{"self":[{"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/posts\/3588"}],"collection":[{"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/users\/51"}],"replies":[{"embeddable":true,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/comments?post=3588"}],"version-history":[{"count":9,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/posts\/3588\/revisions"}],"predecessor-version":[{"id":8277,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/posts\/3588\/revisions\/8277"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/media\/3590"}],"wp:attachment":[{"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/media?parent=3588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/categories?post=3588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nationalland.com\/blog\/wp-json\/wp\/v2\/tags?post=3588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}