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Financial Planning / Tax Strategies
|Subject: Re: bought forest property||Date: 2/16/2013 5:32 AM|
|Author: AndrewXnn||Number: 117797 of 121572|
My Dad bought 55 acres at auction about a decade ago for $18K.
Not sure how it is being treated for taxes.
We call it "the farm" since it used to be a farm.
It is half wooded and was half open fields.
I helped plant about 4000 trees; Black Walnut, Black Cherry, Red Pine, Cedar, Doug Fir, American Chestnut (experimental). He bought a nice John Deere tractor that he uses to mow the open parts. Probably paid more for the tractor than the land. There is also a "barn".
Separately, he has another 200 acres that were logged a while back, but there are no structures or equipment on that property. With good management, it is possible to harvest trees about every 10-20 years.
Also, at my own home (3 acres) I've planted several hundred trees as well. However, I've made no attempt to gain any federal tax benefit from them. Also own a much smaller John Deere that I use to mow the lawn and trim around some of the trees.
Know a guy at work that was recently audited by the IRS about his hobby farming and Real Estate activities (don't call yourself a real estate agent unless you really are one). However, from talking with real farmers, the bigger issue is property taxes.
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