GOP Releases Tax Reform Blueprint, Impact on Forest Owners Uncertain

In late September, President Trump and Congressional Republicans unveiled a “unified framework” for reforming the tax system with goals to simplify the tax code, boost economic growth, create jobs, and promote investment.

The framework proposal lacks crucial details so it’s difficult to predict how forest landowners will fare under it.  The proposal does contain several elements favorable to private timberland owners, including the repeal of the estate tax, allowing businesses to immediately expense the cost of new investments, and cutting tax rates for pass-through businesses.  However, it also proposes to eliminate most itemized deductions, such as the current write-offs for state and local income, property, and sales taxes.  The elimination of the property tax deduction could potentially have a huge impact on the taxes paid by landowners, particularly those living in high-tax states.

Also unknown at this point is the future of the federal timber tax provisions that are currently part of the tax code.

With the tax blueprint in hand, Congressional lawmakers will now spend the next several months hammering out specifics and negotiating critical details of a tax overhaul bill, which may or may not make it to a vote before the clock runs out at the end of the year.

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