To estimate the value of your timber, take the volume, divided by 1,000, and multiply it by the price quoted in your states standing timber stumpage report.
How much is an acre of standing timber worth?
Would-be lumberjacks should expect to pay $1,000 to $2,000 per acre, plus the value of the timber growing on it, which can add anything from zero to up to $15,000 an acre to the price for stands averaging 50 years of age.
How much money can I make selling my timber?
Depending on the type of trees and the market when the timber is sold, you could earn $500 to $2000 per acre (at $1500, you would be looking at $60 per year in income if you were to annualize it over 25 years).
How do I treat sale of timber on my taxes?
You report the sale expenses on the new Form 8949 and Form 1040 Schedule D. It is prudent to file Form T (see page 25). Timber sale expenses are fully deductible from the sale proceeds. If your timber holding is an investment, report timber sale expenses on the new Form 8949 and Form 1040 Schedule D (see page 7).
What percentage does a logger take?
A fundamental feature of any contract is method of payment. In logging contracts, payment is most often based on either dollars per unit or a percentage of the value of the wood. Historically, loggers have worked on a percentage basis, and 50 percent of the value of the wood was standard operating proce- dure.
What’s the best way to sell your timber?
There are two methods of selling timber. You may choose either to harvest your own timber and sell the cut product — such as veneer and saw logs, pulpwood, posts and poles — or to sell the standing trees and allow the buyer to cut and haul them.
Is it taxable to sell land with standing timber?
Standing timber is the tax element of a land sale, taxable to the seller. It is in the interests of the seller to negotiate standing timber values as low as possible. The exact opposite is true for the purchaser – he wants to have as high as possible standing timber values.
How is a timber sale treated as a capital gain?
If a timber owner, who is in the business of selling timber, sells timber outright or with a retained economic interest, the profit from the sale is treated as a long-term capital gain. To qualify for 631 (b) treatment, the timber owner must sell the trees on the stump.
Where can I find out what my timber is worth?
First, you can contact your service or County Agricultural Extension or Forestry Extension agent. Service forestry personnel are often located within the state Department of Natural Resources, Division of Forestry, or Forestry Commission.
