Advocacy Group Seeks Changes To Tax Laws Related To Natural Disasters

Last year was a record year of natural disasters, including hurricanes and wildfires which inflicted huge economic losses on timberland owners in the U.S. South and West Coast.  The Forest Landowners Association (FLA) is leading an effort to advocate for changes to federal tax laws to assist forest landowners with catastrophic losses due to natural disasters.

The Forest Recovery Act (H.R. 1444), by Congressman Buddy Carter (R-Ga.), seeks to eliminate the “basis limitation rule,” allowing the fair market value loss of timber as a result of a natural disaster to be tax-deductible.

Currently, forest landowners may only deduct the lesser of the fair market value or the cost basis, which is often $0 or a fraction of the fair market value.  The new law would allow forest owners to deduct the full market value for the timber prior to the loss.

The basis limitation rule disincentivizes private landowners from growing trees, which in turn limits available forest products, hurts rural economies, and endangers the environment.

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