With today being the deadline for most Americans to file their tax returns, the Forest Landowners Association (FLA) is calling on Congress to fix a provision in the Internal Revenue Code related to timber losses from natural disaster.
Forest landowners often face large financial obstacles to reforest their lands following a natural disaster. This is most evident during tax season when landowners discover their ability to claim a casualty loss for destroyed timber is severely limited, often resulting in no deduction to recoup the economic loss of their timber.
“The current tax treatment of timber losses from disasters such as hurricanes, floods and wildfires is making it difficult for private timber owners to recover and replant trees,” said FLA CEO Scott Jones. “Losing timber is not like losing a row crop or livestock, it takes more than 20 years to receive income from planting trees. Decades of hard work can be destroyed in just one day due to natural disasters leaving forest landowners without economic recovery options that other farmers have for their crops.”
As Congress looks at trees as a solution to climate change– FLA is calling on lawmakers to fix the tax code to sustain the landowners who manage the majority of the nation’s private forests. U.S. forests and forest products offset 15% of U.S. industrial carbon emissions every year. Even more astonishing is that 73% of that comes directly from private forests.
The simple fix is to modify the tax deduction for casualty losses of uncut timber to allow the landowner to deduct the value of their trees before the loss. Recovering these costs will make it easier for landowners to replant after a natural disaster, which not only protects the landowner’s livelihood but also supports climate mitigation, rural economies and the domestic timber supply.
Fixing the tax code will provide a permanent solution for landowners and keep their working forests working.
“Along with strong timber markets, having a tax code that allows private forest landowners to recover after natural disasters and that encourages replanting of trees is more important than ever given that the nation’s forests are being viewed as a key to fighting climate change,” stated Jones. “FLA renews its request for Congress to fix the casualty loss issue.”