Am I Eligible for Reforestation Tax Benefits?

The answer is: probably, but the specifics may vary. Whether you qualify for the reforestation tax incentive and how you get to claim it depends on your property and your status as its owner. 

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Credit: Shutterstock

The first and most important factor is your land. It qualifies for reforestation tax benefits if it is:

• located in the United States
• used to grow and cut timber to be sold for making commercial timber products
• contains at least one acre planted in a manner that’s consistent with standard practices

If your property is planted in shelter belts (windbreaks), ornamental trees, or Christmas trees, it does not qualify.

The other factor is how you own your land. All landowners are eligible to amortize their reforestation expenses. If you hold your land in a trust, the only thing you can do is amortize your expenses – you’re not eligible for the initial, all-at-once $10,000 deduction. If you own your land as an individual or corporation, however, you can take both the $10,000 deduction and the amortization.

Next, we’ll break down how to do that.