The determining of your timber tax basis is the most important part of reporting federal timber tax obligation. It is simply declaring, with some documentation, the value of your forest and timber when you purchase, inherit, are gifted or exchange timberland.
The basis of property is usually its cost, along with any other expenditures incurred to initially acquire the property. The timber value is a very important part of a property's basis and should be determined. The determined value of the initial timber account will then become you depletion unit used for future timber tax considerations.
Read more about Determining Your Timber Tax Basis
Comments