🚀 go-pugleaf

Oh boy.  I'll reserve most of my thoughts for the consultants here that are
sure to post.   One question:  Did you have a forester establish your timber
basis when you came into the property -- or at least before you sold
timber?  Doing so would have prevented Uncle Sam from taxing your timber
revenue until you've profitted above and beyond what the trees were worth
when you received the land (and other related timber activity costs such as
land surveying, etc.).  Similar to capital gains on stocks, you need only
pay taxes on the "capital gains" of your timber investment.  Its still not
too late to salvage some of this, but acquire a forester that is working for
YOU first and foremost, not the timber buyer.

I am glad, however that you like the results, but again looks can be
deceiving -- even high grades can initially look "pretty".

Guys??? -guys being a unisexual term.

Regards.


Robinson wrote:

> Last year I sold some timber to a company in Covington,Ga. and I was not
> very pleased with the the way they left my place looking. It looked like
> their skidders were driven by a bunch of blind monkeys.
>  Recently I needed to sell some timber on small (40 acre) tract to cover
> some unexpected medical expenses. I sent out about 10 letters to timber
> buyers in my area, 2 came out to look at it and made offers. The first
> offer was way low, the second was a good offer but for some reason they
> got hesitant and decided to back out of the deal. At the time I thought
> maybe they had made a mistake and over bid but they just didn't want to
> say so.
>  It was just as well because I ended up selling it to Canal Wood Corp.
> and I was extremely pleased with there work. I sold it to them by the
> ton and it ended up bringing more money than either of the two earlier
> bidders. Eddie Cardell, the manager from their Forsyth,GA office was out
> here everyday making sure everything was done right and checking in with
> me. I spent a lot of time with him walking the woods and asking
> questions about forestry practices, log grading, getting advice on
> future improvement of my timber and just learning all I could  about the
> timber business ( I'm new at this, my wife and I inherited the land from
> her grandfather a couple of years ago).
> I was also very impressed by the guy they had operating their cutter,  I
> had asked them to thin the pine and take gum, poplar and other
> palletwood trees but to leave all the oaks and hickories ( I lease the
> land to hunters and wanted to leave lots of deer and turkey food). I
> watched the cutter operator(Albert) working everyday and he really has a
> talent for running that giant machine. Instead of bumbling around like a
> bull in a china shop as I've seen some do, he cut nice neat paths into
> each area and then worked off the sides of the path to cut,and tried to
> keep the skidders just on the main path  to minimize the damage they
> did.
>  I was so pleased with they way that tract ended up looking that I
> decided to have Eddie look at our main tract which is about 115 acres.
> This was the tract that had been partially butchered by the other guys
> last year. I ended up letting them thin that as well, and was very
> pleased by the money I got on it as well as how it looked. Our land had
> not really been managed properly by my wifes grandfather , but now I
> feel like it's in good shape to grow some better quality pine .
>  I was a little hesitant to sell by the ton, because I know that you can
> get taken  that way, but I was at home most of the time so I kept my own
> tally of the truckloads going out and they matched up with the scale
> tickets I was receiving.
>  So I guess my advice to others is don't make money the only
> consideration, find a buyer who is willing to take the time to
> understand what you want to do with your land, who takes pride in there
> work and who is willing to share their knowledge in order to make you a
> better timber grower.
> Mike
> Mike and Lorri Robinson
> Monticello, GA
>
> Scratchbottom Shires: http://www.geocities.com/Yosemite/Forest/4242/
> The Robinson Homestead: http://www.geocities.com/Heartland/Pointe/1915/

Robinson <robfarm@bellsouth.net> wrote in article
<36E5A159.7C7F@bellsouth.net>...

<snip>

>  I was so pleased with they way that tract ended up looking that I
> decided to have Eddie look at our main tract which is about 115 acres.
> This was the tract that had been partially butchered by the other guys
> last year. I ended up letting them thin that as well, and was very
> pleased by the money I got on it as well as how it looked. Our land had
> not really been managed properly by my wifes grandfather , but now I
> feel like it's in good shape to grow some better quality pine .
>  I was a little hesitant to sell by the ton, because I know that you can
> get taken  that way, but I was at home most of the time so I kept my own
> tally of the truckloads going out and they matched up with the scale
> tickets I was receiving.
>  So I guess my advice to others is don't make money the only
> consideration, find a buyer who is willing to take the time to
> understand what you want to do with your land, who takes pride in there
> work and who is willing to share their knowledge in order to make you a
> better timber grower. 
> Mike
> Mike and Lorri Robinson	
> Monticello, GA
> 

Excellent post, Mike!!!!  All landowners wishing to "treat" their land, use
this as a template for getting a good job out of your logging contractor.
It is always good to go and see some previous jobs to see their quality of
work, too. Demand that from them before signing into anything!
-- 
       Larry Harrell Fotoware
Making software out of Fotos for over five years now
New version of "Virtual Yosemite"!! 
Downloadable demo available at http://www.lhfotoware.com/vitual.htm
Check out my web site at http://www.lhfotoware.com

> Oh boy.  I'll reserve most of my thoughts for the consultants here that are
> sure to post.   One question:  Did you have a forester establish your timber
> basis when you came into the property -- or at least before you sold
> timber?  Doing so would have prevented Uncle Sam from taxing your timber
> revenue until you've profitted above and beyond what the trees were worth
> when you received the land (and other related timber activity costs such as
> land surveying, etc.).  Similar to capital gains on stocks, you need only
> pay taxes on the "capital gains" of your timber investment.  Its still not
> too late to salvage some of this, but acquire a forester that is working for
> YOU first and foremost, not the timber buyer.

  Hmmm, guess I am in the chair to be learning something this time, cause
I am being hit with a $3K tax bill due to lumber I harvested this last
year thru capitol gains.

  What exactly is needed to relieve me of this tax burden?

  In other words MORE MORE!!!

  I did have a forester come onto my place, but never asked for any
estimate of value before hand.

  Although compared with the original poster of this thread, I have
utterly no complaints about the loggers who work my place, they performed
as they stated they would and they did a professional job too.

  I sent out to about a dozen companies, took their replies and went to
various neighbors and such to see if anyone had heard anything good or bad
about any of the outfits.  Eliminated the outfits which received bad
recommendations, and narrowed it down to one thru my questions of them and
their answers to my questions (both the answers and the manner they
imparted the answers).

  Heck they even stacked the end cuts right where I wanted them, so I can
process those cuts into firewood when I have the time to do so.
-- 
BulkMailers and Email address compilers may purchase this
individual email address for $25000.00 for use in their
products. Anyone selling this email address or utilizing
this email address for any commercial usage without a
license from ShadowMAC is in violation of private property
rights and violators WILL be be invoiced for usage.
Selling what you do not own is THEFT of private property!!!
This is domain policy.
http://shadowmac.org/license_schedule.html

In article <strider-1003990147420001@ppp-67-107.dialup.winternet.com>, 
strider@ShadowMAC.org writes: 

>   Hmmm, guess I am in the chair to be learning something this time, cause
> I am being hit with a $3K tax bill due to lumber I harvested this last
> year thru capitol gains.
 
>   What exactly is needed to relieve me of this tax burden?

>   In other words MORE MORE!!!

When you purchase a tract of land with trees on it, those trees have some 
value which you paid cash for.  Your original investment is not subject 
to capital gains tax, only the return in excess of the basis for value.

The easiest and most reliable way to establish the basis is to agree on 
it with the seller at the time you purchase the land.  When it becomes 
part of the sale contract, there is no way the IRS can challenge the 
basis.  The timber was offered at that price, and you paid for it. 

Another way is to establish a basis yourself, either by hiring an 
appraisal at purchase, or doing the estimate yourself.  By waiting until 
after you log it to assign a basis, you are placing yourself in a shaky 
position with the IRS, but give it a try anyway.  There is no reason to 
pay capital gains on your original investment.

I found a few years back that hiring a good accountant who understands 
farm operations to do my taxes pays for itself and eliminates all those 
headaches at tax time.  I consult with him before I buy or sell 
equipment, land, or whatever.  You have the choice of taking returns from 
timber sales as straight income or as capital gains, depending on how you 
handle the sale.  Under the current tax code, capital gains is probably 
the better choice.

-- Larry