Timber Damage – What to Know About Claiming a Loss After a Natural Disaster

Natural disasters can damage timber and forests. If a storm or any other natural disaster damages your trees, you may be able to get some money back when you pay taxes. This is called a timber casualty loss deduction.

How it Works

The IRS lets people who have been in a natural disaster deduct their losses from taxes. This include timber damage. The IRS defines timber as “standing trees or logs that are cut and ready for sale.” Certain criteria must be met:

The disaster must have been sudden or unexpected, like a flood or tornado.
You have have an economic loss that is not covered by insurance.
You must have owned the property at the time of the event.
You also need to try to repair or replace the damaged property before taking the deduction.

How Much Can I Deduct for Timber Damage

The amount you can deduct from taxes after a timber disaster depends on how much it was worth before and after. Subtract the value of your timber after the disaster from its value before (minus any salvage value). For example, if it was $100 before and $20 after (minus $10 in salvage), then you can deduct $70 ($100 -$20 – $10 = $70). You might not have to pay taxes for up to $100 of the loss if your income is below a certain amount (see IRS Publication 547 for more info).

If your forest or trees were damaged in a natural disaster, like a tornado you may be able to get money back on your taxes. You will need proof that it was damaged and how much it was worth before and after the disaster. Ask an expert for help with showing this to the tax office. Then you can try to get the deduction. Good luck!

DISCLAIMER – Southeast Forestlands and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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If you wish to get in contact with knowledgeable member of our timber sales administration staff, feel free to contact Southeast Forestlands. Whether assisting you in timber sales or simplify answering your question, we are always ready to help in anyway we can!

A few more words of advice be wary of the buyer who solicits a limited-time offer or attempts to rush you into a decision. The “hurry-up” proposal will often run you into selling your valuable timber for the lowest dollar amount.

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