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TIMBER AND TAXES William C. Siegel, J.D. TAX TREATMENT OF GOVERNMENT COST-SHARE PAYMENTS (Published in April 2005 issue of National Woodlands magazine) Woodland owners who receive a cost-share payment from a federal or state government program generally must report the payment as part of their gross income. However, under the provisions of Section 126 of the Internal Revenue Code, the recipients can then choose to exclude from their income all or part of such payments that meet two requirements. To view entire article TIMBER AND TAXES
With funding from NCR-SARE and Pioneer Forest, LLC, EOFC conducted a harvest study to determine whether crop tree management was profitable for landowners and loggers. In this type of management, small and poor quality trees are removed to favor growth of selected crop trees, which then acquire higher value. Thus, co-harvesting saw logs and smallwood improves the forest and its earnings potential. A surprising result was that smallwood harvest paid for itself and that loggers could afford to pay landowners a modest fee of $5/ton of blocking and $4/ton of pulpwood sold in addition to the stumpage or shares paid for saw timber. We also found that cost of installing erosion control structures was minor. |
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