Taxpayers who are not active enough or who cannot expect a profit often enough to qualify as either active or passive participants in a trade or business may consider themselves investors in their timberland. In this case you may deduct management expenses as miscellaneous itemized deductions. The expenses are added to other miscellaneous deductions and you are allowed a deduction for the amount which is over 2% of your adjusted gross income. You may
also chose to “capitalize” your expenses - deduct them when you dispose of your investment.
Federal Income Tax on Timber
A Key to Your Most Frequently Asked Questions
<a rel="nofollow" target="_blank" href="
http://www.fs.fed.us/cooperativeforestry/library/timbertax.pdf">http://www.fs.fed.us/cooperativefore...>
<a rel="nofollow" target="_blank" href="
http://www.for.msu.edu/uploads/files/extension/facts15.pdf">http://www.for.msu.edu/uploads/files/ext...>
