Note to Timber and Cattle Articles:

The following articles provide information regarding the loss of timber due to a weather related disaster or the forced sale of cattle due to disease or weather. (I take no credit for the articles other than think that they are well written).

In reviewing the timber article, notice that the casualty loss deduction is limited to the lessor of its adjusted basis or fair market value. Generally, individuals growing timber expense the reforestation costs via immediate deduction (up to $10,000) and amortize the excess over a seven-year period. The annual costs associated with maintaining the trees is also generally expensed. As a result, the timber has no basis resulting in no deduction for the casualty loss.

With regards to the cattle article, the important take away is that taxes are ultimately not avoided but deferred if a full replacement of the animals is made on a $ for $ basis. The replacement period is two years for disease and four years for a weather-related disaster.

Income Tax Deduction on Timber

Tax Relief for Cattle Producers