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Department of the Treasury
Instructions for Form T Internal Revenue Service

(Timber)
(Rev. December 2013)
Forest Activities Schedule

Section references are to the Internal If you are required to file capitalized, (b) amortized, or (c)
Revenue Code unless otherwise noted. Form T for the current tax claimed as an ordinary expense.
CAUTION! year (as discussed above
Keep separate records for each
Future Developments under Who Must File), complete all unique stand identifier, depletion
For the latest information about the parts of the form that apply. account, block, tract, or geographic
developments related to Form T However, if you are not required to file area tributary to a mill or mill complex.
(Timber) and its separate instructions, Form T but have other forest-related Also, keep records that verify the
such as legislation enacted after it is activities (reportable in Part I basis in property for as long as they
published, go to www.irs.gov/timber. (Acquisitions), Part IV (Reforestation are needed to figure the basis of the
and Timber Stand Activities), or Part V original or replacement property.
General Instructions (Land Ownership), complete and
attach the appropriate tax form (for
Purpose of Form example, Form 4562 to claim Specific Instructions
Use Form T (Timber), Forest Activities depreciation) or statement to your
Schedule, to provide information on income tax return to report these Part I. Acquisitions
timber accounts when a sale or activities. Also, maintain adequate Complete this part if you acquired
deemed sale under sections 631(a), records as discussed in timber, timber-cutting contracts, or
631(b), or other exchange has Recordkeeping, below. forest land during the tax year,
occurred during the tax year. whether the acquisition was by
purchase, exchange, gift, or
For additional information Recordkeeping
inheritance.
regarding federal income tax rules for Maps. Do not attach maps of your
reporting forest-related activities, see timber properties to Form T to How to Report Acquisitions
the following publications: substantiate any claimed deduction Report acquisitions during the tax
Pub. 225, Farmer’s Tax Guide, for depletion of timber. Instead, you year (whether taxable or not) of
Pub. 535, Business Expenses, and are required to retain records timber, timber-cutting contracts, or
Pub. 544, Sales and Other sufficient to substantiate your right to forest land. Report separately each
Dispositions of Assets. claim the deduction, including a map acquisition of $10,000 or more.
(where necessary) to show clearly the You may combine acquisitions of
Who Must File location(s) of timber and land less than $10,000 for each account
Complete and attach Form T to your acquired, timber cut, and timber and and omit lines 2 and 3. For an
income tax return only if you: land sold for as long as their contents acquisition by gift or inheritance, skip
Claim a deduction for depletion of may become material in the lines 4 through 7.
timber, administration of any Internal
Elect under section 631(a) to treat Revenue law. For an acquisition or lease of
timber-cutting rights on a pay-as-cut
the cutting of timber as a sale or Other business records. You must
basis, except for those under which all
exchange, or also keep business records to support
cutting is completed within the tax
Make an outright sale of timber other items reported on your tax return
year, do not complete lines 4 through
under section 631(b). such as expenses incurred during the
8. Instead, list the provisions of the
Complete Form T in accordance tax year for road construction and for
purchase or lease agreement,
with sections 194, 611, 631, and building drainage structures.
including the number of years from
1231, and the related regulations. the effective date to the expiration
Note. Maintain separate cost
Exceptions. You are not required to accounts for road construction and date, annual minimum cut or payment,
file Form T if you only have an drainage structures, such as ditches and the payment rates for different
occasional sale of timber (one or two and canals. For example, for roads kinds of timber and forest products.
sales every 3 or 4 years). However, constructed for logging timber or to Follow the format of lines 1 through 9
you must maintain adequate records conduct management activities on fee on additional sheets if necessary.
of these transactions and other land or land held under long-term What Is Included in Each
timber-related activities during the cutting contracts, maintain records Account
year, as discussed in Recordkeeping, showing the number of miles
below. These transactions may be constructed and how the total You must include your timber in one
treated as an investment for tax expenditures were either (a) or more accounts. Generally, each
purposes if your property is not held account must include all your timber
for use in a trade or business.

Jun 20, 2013 Cat. No. 39879B

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that is located in one “block.” A block Line 18a Valuation evidence. The records
may be: If you are making the 631(a) election, must provide evidence in the form of
1. An operational unit that includes or have made the election in a prior actual sales of comparable timber as
all timber that would logically go to a tax year, check the “Yes” box on of the valuation date, along with other
single point of manufacture, line 18a. valuation evidence used. Include a
2. A logging unit that includes all computation showing the difference
timber that would logically be Note. The 631(a) election cannot be between the cost (excluding timber or
removed by a single logging made on an amended return. stumpage cost) and value of the
development, or You must maintain the following primary wood product (logs or other
records. roundwood, chips, etc.) at the mill or
3. An area established by the
geographical or political boundaries of Adjusted basis for depletion. plant. Give detailed evidence that
logical management areas. Timber Maintain records that show the permits a comparison with the timber
acquired under a cutting contract may adjusted basis for depletion, fair on which you report a value.
not be included in part of a block, but market value (FMV), and gain or loss Additional information. The records
should be kept in a separate account. for each sale or exchange of standing must include the following additional
timber for which you have a section information:
For exceptional cases, the timber in 631(a) election. The records must 1. Location of the sawmill, log
a given block may be divided into two show the adjusted basis for depletion market, or other point of delivery of
or more accounts. See Regulations and the FMV of the timber as of the the logs or wood to the user or buyer.
section 1.611-3(d) for more first day of the tax year in which timber
information. was cut. The records must show 2. The total MBF, log scale, cords,
these amounts by species and unit or other units of timber cut, and the
Part II. Timber Depletion rates if these transactions are length and diameter of the average
Complete this part for each timber reported on a species basis. The gain log or the average number of units per
account that has changed in quantity or loss on standing timber is reported tree.
or dollar amount. A timber account on Form 4797, Sales of Business 3. The percentage of rough
may change in quantity or dollar Property. lumber grades, by species,
amount as a result of acquisitions, manufactured from the timber during
Date of acquisition. The records
dispositions, the cutting of timber, the year, or, if cut timber is sold as
must provide the date of acquisition of
capitalized expenditures, casualty or logs, the percentage of log grades, by
timber that was cut in the tax year, if
theft losses, corrections, additions for species.
acquired after March 1, 1913; the
growth, and transfers from other
quantity of timber remaining (adjusted
accounts. Use this part to figure Timber owned or held under a con
depletion for timber cut or the basis for growth, correction of estimates, tract right to cut. Show the amount
for timber sold or lost during the tax changes in use, and any change in of timber owned, or held under a
year. A depletion schedule is required the log rule or other measure used); contract right to cut, for a period of
to be maintained for all types of timber and the adjusted basis at the more than 1 year. Show separately
beginning of the tax year. The records
ownership. the quantity of timber cut that was
must state the acreage cut, the held for less than 1 year. The scale of
Lines 1 through 6 amount of timber cut from the logs purchased during the year must
Provide data for each timber account applicable block during the tax year, be shown by species and quantity and
separately. Account for any changes and the log rule or other method used excluded from the quantity shown as
that have occurred during the tax to determine the quantity of timber cut under section 631(a) in Part II,
year. Attach as many additional pages cut. If depletion accounts are kept by line 17. Also show the number, cost,
as needed. If you deplete on a block separate tracts or purchases, give the and point of delivery of purchased
basis, combine new purchases with information separately for each tract logs by species and grade.
the opening balances and use the or timber purchase.
average depletion rate shown on If an average depletion rate based Line 18b
line 8, column (b), for all timber cut or on the average value or cost of a If you are revoking your 631(a)
sold, regardless of how long held. timber block was used in earlier years, election, check the “Yes” box.
the adjusted basis referred to in
Line 14, column (b) If you made a section 631(a)
section 631(a) is the average basis
election for any tax year ending before
The casualty loss limitation is shown on line 8, column (b), after
October 23, 2004, you can revoke that
determined by the decrease in fair adjustment.
market value (FMV) of the Single election without the consent of the
Identifiable Property (block) before Characteristics of the timber. The IRS for any tax year ending after
and after the casualty event, not to records must describe in detail the October 22, 2004. The prior election
exceed the basis in the affected block. characteristics of the timber that affect (and revocation) is disregarded for
Keep FMV appraisals in your records its value, such as total quantity, purposes of making a subsequent
to support the claimed loss (see species, quality, quantity per acre, election. Unless this special rule
Recordkeeping, earlier). size of the average tree, logging applies, or the election was made for
conditions, and distance to markets. a tax year beginning before 1987, you
can only revoke a section 631(a)
election with IRS consent.

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Part III. Profit or Loss From spraying, and thinning) applied to a block) for which depletion is allowed
timber stand regardless of age. or for casualty losses (that is, lines 13
Land and Timber Sales
and 14 of Part II) or other purposes.
Complete this part to report all Line 4a. Reforestation The qualified timber property account
dispositions of timber, timber-cutting Expenses must be maintained until after the
contracts, or forest land during the tax By entering an amount on this line, timber is disposed of through sale,
year (whether taxable or not). Do not you are indicating that you have harvest, or other transaction.
report dispositions by gift or elected to deduct qualifying For each qualified timber property
distributions made by an estate or to a reforestation expenses that were paid (QTP), keep detailed information to
beneficiary. or incurred after October 22, 2004, for support reforestation costs, showing
Report each sale involving total each qualified timber property under treatments and dates of application.
consideration of $10,000 or more. section 194(b). You must complete Each qualified timber property is
You may combine sales of less than line 1 of Part IV listing the following: required to have a unique stand
$10,000 for each timber or land The account, block, tract, area or identifier. Retain this information for
account and omit lines 2 and 3 for stand identification number for each your records. Report expenses such
each combined small sale. qualified timber property (QTP); as supplies, labor, overhead,
The kind of activity (burning,
Outright sales of timber. Certain transportation, tools, and depreciation
chopping, spraying, planting, seeding,
rules under section 631(b) allow the on equipment.
thinning, pruning, fertilizing, etc.);
landowner to treat outright sales of Site preparation. Report all
The number of acres treated; and
timber as capital gain. The rules expenses incurred during the tax year
extending capital gains treatment to The total expenditures.
for preparing the land for planting or
outright sales of timber are similar to The aggregate amount of seeding (including natural seeding).
certain disposals of timber under a reforestation expenses which can be Include expenses for clearing the land
contract with a retained economic claimed on line 4a for any tax year of brush and culling trees by burning,
interest. However, for outright sales, cannot exceed $10,000 ($5,000 if disking, chopping, shearing and
the date of disposal is not deemed to your filing status is married filing piling, spraying with herbicides, or
be the date timber is cut because the separately) for each qualified timber other measures taken to aid
owner may elect to treat the payment property for any tax year. The successful site reforestation. Report
date as the date of disposal. For more remaining costs (line 4b) can be this information separately for each
information, see section 631(b) and amortized over an 84-month period unique stand identifier, depletion
Pub. 544. using the half-year convention under account, block, tract, or operating
Timbercutting contract. For a sale section 194(a). For more information area tributary to a mill or mill complex.
or lease of timber-cutting rights on a on reforestation costs, see Pub. 535. Report contract work separately from
your employees' work.
pay-as-cut basis, that will be paid for If you do not elect to deduct
at intervals during the cutting period reforestation expenses under section Planting or seeding. Report the
according to the number of units cut, 194(b), all reforestation expenses will expenses you incurred during the tax
complete lines 4, 7, and 8, only for be capitalized in a deferred timber year for planting seedlings or sowing
accounts that must be reported on depletion account. seed to reforest the land. Report this
your current year income tax return. information separately for each
Instead of completing lines 5a, 5b, Reforestation expenses are direct unique stand identifier, depletion
and 6, briefly state the provisions of costs incurred for reforestation by account, block, tract, or operating
the sale or lease agreement, including planting or artificial or natural seeding. area tributary to a mill or mill complex.
the number of years from the effective This includes costs for the preparation Report contract work separately from
date to the expiration date, annual of the site, of seeds or seedlings, and your employees' work.
minimum cut or payment, and the for labor and tools, including
payment rates for the different kinds depreciation of equipment such as Other silvicultural activities.
of timber and forest products. You tractors, trucks, tree planters, and Report all expenditures that must be
may combine small sales or leases of similar machines used in planting or capitalized and items that you elect to
timber-cutting rights on a pay-as-cut seeding. capitalize. Also, list on a separate
attachment items that are treated as
basis that were completed within the Reimbursements under govern current deductions (including, but not
tax year. Follow the format of lines 1 mental reforestation costsharing limited to, weed control, pruning,
through 8 on additional sheets if programs. If you have been fertilization, thinning, insect and
necessary. reimbursed under any governmental disease control). Report this
reforestation cost-sharing program, information separately for each
Part IV. Reforestation and you may not claim these expenses unique stand identifier, depletion
Timber Stand Activities unless the amount reimbursed has account, block, tract, or operating
Summarize your expenditures for been included in your income. area tributary to a mill or mill complex.
reforestation and timber stand Qualified timber property (QTP). Report contract work separately from
activities during the tax year. Timber Any qualified timber property subject your employees' work.
stand activities include all silvicultural to section 194(b) may not be For more information, see section
prescriptions (such as burning, combined with any other qualified 194 and Regulations section 1.194-3.
timber property account (depletion

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Part V. Land Ownership is subject to the Paperwork Reduction their individual income tax return. The
Complete this part to show all Act unless the form displays a valid estimated burden for all other
changes in your land account, OMB control number. Books or taxpayers who file this form is shown
including sales or exchanges, during records relating to a form or its below.
the tax year. Attach as many instructions must be retained as long
additional sheets as needed, following as their contents may become
the format of lines 1 through 6. material in the administration of any Recordkeeping. . . . . . . . 34 hr., 12 min.
Learning about the law or
Internal Revenue law. Generally, tax the form. . . . . . . . . . . . . 42 min.
Paperwork Reduction Act Notice. returns and return information are Preparing and sending
We ask for the information on this confidential, as required by section the form to the IRS . . . . . 1 hr., 17 min.
form to carry out the Internal Revenue 6103.
If you have comments concerning
laws of the United States. You are The time needed to complete and
the accuracy of these time estimates
required to give us the information. file this form will vary depending on
or suggestions for making this form
We need it to ensure that you are individual circumstances. The
simpler, we would be happy to hear
complying with these laws and to estimated burden for individual
from you. See the instructions for the
allow us to figure and collect the right taxpayers filing this form is approved
tax return with which this form is filed.
amount of tax. under OMB control number
You are not required to provide the 1545-0074 and is included in the
information requested on a form that estimates shown in the instructions for

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