Timber Depletion Deduction

Income Taxes on the Sale of Timber Frequently Asked ...

Timber depletion is cost based and is not a tax preference item which will trigger the Alternative Minimum Tax. Depletion for timber is based upon the cost of your property when you acquired it. It is possible to have a depletion deduction greater than the amount received for the timber cut, resulting in a loss for tax purposes.

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Timber Depletion Deduction - Metcalfe Forestry

The timber depletion deduction for this property is then $82,500.00 divided by 200 MBF or $412.50 per MBF. This means that for every thousand board feet of sawtimber you sell you will get to deduct $412.50 from the sale price to arrive at your taxable income. In this example, let’s assume you sold some of the timber for $400.00 per MBF.

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Federal Income Tax on Timber - US Forest Service

6 1. Made a Timber* Sale • Expenses of sale * The term “timber” includes the parts of standing trees that could be used to manufacturer lumber, pulpwood, veneer, poles, piling, crossties, chip-n-saw, and other wood products. Also included are evergreen (conifer) trees aged 6 years or older when they are severed from their roots and sold for ornamental purposes, e.g., Christmas trees.

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26 CFR 601.204: Changes in accounting periods and in ...

26 CFR 601.204: Changes in accounting periods and in methods of accounting. (Also Part I, §§ 56, 61, 77, 118, 162, 163, 166, 167, 168, 171, 174, 179D, 194, 195,