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 total cost at purchase, 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 your depletion unit used for future timber tax considerations.
- Determining Your Timber Tax Basis
- Filing and Reporting Your Federal Timber Tax
- Who Must Pay Timber Tax