Forestland Options & Responsibilities (sales, 2014, home)

[Boone1791]

We have more than 6 acres and had a couple dead trees taken down and cut into firewood. We chose the forestland "bare land and yield" option to designate our forestland for county assessment. Do we have to do (pay) anything as a result of these trees being taken down?

[Cnynrat]

I don't believe so. With Bare Land & Yield you pay taxes when you sell timber, or when you sell your property. I think there is a way to avoid the yield tax when the property changes hands if the buyer is willing to assume that liability, but I'm not sure how that works.

Dave

[oregonwoodsmoke]

Did you receive any money for the firewood? That would be income.

Myself, i would deduct the cost of removing dead trees as "maintenance" expense.

However, to be safe consult the state forester., who should know the rules.

Or, the extension agent probably knows the forestry rules.

[Boone1791]

Originally Posted by oregonwoodsmoke

Did you receive any money for the firewood?

No. It cost us quite a bit to have the trees taken down and cut into firewood, which we kept. We got the value of the firewood, but that doesn't bring us near to coming out ahead.

[The.Great.Oxen]

Evening,


Y'all have to forgive me as I am chiming in a bit late on this but this thread caught my eye... I've been looking at buying some land in MT, and ID is another option that I still am throwing up in the air. What is this talk about "bare land & yield" and such?


I ask because when I was living in WA, what was on your land timber or not was yours to do with. Is this something specific to ID ?

[Cnynrat]

In Idaho some property owners can file a timber management plan with their county and get favorable property tax treatment in return. A minimum of 5 acres must be covered under the management plan. If your home is located on the property it will be assumed to sit on 1 acre, so in that case the smallest property eligible is 6 acres.

Once the plan is filed, that portion of your property will be assessed at a flat rate per acre which is set by the state. The state categorizes properties into 3 (I think) categories based on timber productivity.

When you do this their are two options you can choose from regarding how your property is taxed. The 'bare land and yield ' option gives you the lowest annual tax bill, but in return you pay taxes on the sale of any timber. If you sell the property without having recorded any timber sales you will owe a tax based on the assumed increase in timber value over the time you owned the property.

In the productivity option you pay a little more each year based on the assumed annual increase in timber value, but pay no tax if you sell timber, or when you sell the property.

Most people who own forested property will find they save on property taxes either way.

Dave

[Cnynrat]

I should add that the most common way to get a forest management plan is to have a forester come out and walk your property with you. They will then write the plan based on what you tell them about your objectives and submit it to the county. Most counties have a list of foresters they recommend, but you are free to use your own, or I suppose even write your own plan.

Back in 2014 I think we paid a few hundred bucks for the plan for our 20 acres. As someone who has never owned forested land, I learned enough during that few hours to make the cost worthwhile even setting aside the future tax savings.

Your plan does not have to be focused on timber harvest. Our primary objectives where to maintain the health of our forest and mitigate wildfire risk.

Dave

[Boone1791]

Good explanation, Dave.

Originally Posted by Cnynrat

Most people who own forested property will find they save on property taxes either way.

That's putting it mildly. Like TheGreatOxen, we were unaware of this forestland thing when we first bought the property, so we didn't send anything in to the county. Big mistake! The assessment of the property practically doubled from what it was the year before under the prior owners (who had obviously filed their "forest plan"), with a corresponding increase in property taxes. Believe me, once we figured all this out, we got a forester out here, walked the property with him, learned all about our trees, and he wrote up a plan and sent it in to the county. This saved thousands in property taxes.