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facula72113
New Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

 
9 Replies
PatriciaV
Expert Alumni

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return for the tax year the expenses were paid or incurred. Report this activity on Form T (Timber), Forest Activities Schedule, under Part IV. 

Unfortunately, TurboTax does not support Form T (Timber).

You may obtain a copy here: About Form T (Timber), Forest Activities Schedule

Complete the form and attach it to your return You will need to print, sign, and mail your return (How Do I File By Mail in TurboTax Online?).

facula72113
New Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

I do not need Form T.   I do need to amortize the amount over the allowed $10K for reforestation.  How do I do this via expenses on turbotax.  Needs to go on Form 4562
PatriciaV
Expert Alumni

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

Enter this under Assets/Depreciation as an Intangible Other Asset and elect amortization. All assets entered in this section will be reported on Form 4562.
facula72113
New Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

and how do I get to the asset/depreciation page???
PatriciaV
Expert Alumni

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

This section can be found on the summary page for your business (or farm). There is no direct link to that section, as it depends on the type of activity that relates to the asset. See this post for more help: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1899896">https://ttlc.intuit.com/questions/1899896</a>
garren1999
Returning Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

Form T in Part IV Reforestation and Timber Stand Activities, line 4a instructs, "amount to be expensed under section 194(b).  Where is this amount to be expensed?  

pdclardy
New Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

How does reforestation get claimed for a business expense? If the expenses are less then 10K cannot see how to do this????

MarilynG
Expert Alumni

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

In the Business Expenses section, enter this under Assets/Depreciation as an Intangible Other Asset and elect amortization.

 

Type 'Schedule C' in the Search area, then click on 'Jump to schedule c' to get to the Business section.  EDIT your business to add Income/Expenses.

 

Click this link for more info on How to Enter Business Expenses

 

 

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ClaytonSw
New Member

How does reforestation get claimed for a business expense? If it exceeds 10K it needs to be amortized. I cannot see how to do this????

Forest accounting is complicated.  Where a section 194(b) reforestation deduction is entered depends on the overall amount invested and whether the particular forest stand (the "Qualifying Timber Property") is held as a passive investment, an active business, or a farm (and a forest is not ipso facto a farm).  I highly recommend the "Forest Landowner's Guide to the Federal Income Tax."

 

By election, up to $10,000 can be expensed, with the excess amortized over 84 months, and not added to basis.  Otherwise, the entire amount is capitalized and added to basis.

 

If Form T is otherwise required to be filed for the tax year, the election to expense and/or amortize should be there in Part IV.  

 

If Form T is not otherwise required, a detailed statement is required with the tax return  "that shows (1) the unique stand identifier of each QTP for which you are taking a deduction, (2) the total number of acres reforested during the tax year, (3) the nature of the reforestation treatment, and (4) the total amounts of qualified reforestation expenses eligible to be amortized under IRC section 194(a) or deducted under IRC section 194(b)."  

 

For a forest held as an investment, the deduction is itemized on Schedule A.  For a business or a farm, it is an "other expense" filed on Schedule C or F, as is otherwise appropriate.  Any excess over $10,000 is amortized.

 

Even when not required to be filed, Form T should be completed for your records, your sanity, and good business decision making, as detailed in the aforementioned guide.

 

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