Are you a business dealing in timber-related activities? If so, you must file Form T (Timber) with your income tax return, and maintain certain records, to stay in accordance with federal tax regulations. Learn more about which activities require Form T filing, as well as additional required recordkeeping.
What is Form T (Timber)?
Form T (Timber), Forest Activities Schedule, is a form used to provide information on timber accounts when a sale or deemed sale under sections 631(a), 631(b), or other exchange has occurred during the tax year. Those who must file Form T are those who claim a deduction for depletion of timber, elect under section 631(a) to treat the cutting of timber as a sale or exchange, or make an outright sale of timber under section 631(b). Those required to file must complete and attach Form T to their income tax return in accordance with related regulations. Those not required to file may not attach maps to Form T to substantiate any claimed deductions, but must keep appropriate records as discussed in the form’s Recordkeeping section. Such records should include maps summarizing timber and land acquired, cut, and sold, as well as separate cost accounts for road construction and drainage structures. Separate records must also be kept for each unique stand, depletion account, and geographic area.
IRS Form T (Timber) – Who Needs to Fill It Out?
Form T (Timber), Forest Activities Schedule, is needed to be filled out if you are claiming a deduction for depletion of timber, electing under section 631(a) to treat the cutting of timber as a sale or exchange, or making something of an outright sale of timber under section 631(b). Be sure to follow the instructions outlined in Publications 225, 535, and 544. If you have only an occasional timber sale (1-2 every 3-4 years), you do not need to file Form T, however, records of these transactions must be maintained to comply with federal tax regulations. Additionally, records such as maps (if necessary) and business records should be kept to support items reported on tax returns such as road construction and building drainage structures. Be sure to keep separate cost accounts and records for each unique stand identifier.
Step-by-Step: Form T (Timber) Instructions For Filling Out the Document
Follow these step-by-step instructions for completing Form T (Timber), Forest Activities Schedule. This form is used to provide information on timber accounts when a sale or deemed sale under sections 631(a), 631(b), or other exchange has occurred during the tax year. For additional information regarding federal income tax rules, please consult Pub. 225 Farmer’s Tax Guide, Pub. 535 Business Expenses, and Pub. 544 Sales and Other Dispositions of Assets. Those who must file Form T are those claiming a deduction for depletion of timber, electing under section 631(a) to treat the cutting of timber as a sale or exchange, or making an outright sale of timber under section 631(b). All applicable parts of the form must be completed per sections 194, 611, 631, and 1231. Exceptions include those with an occasional sale of timber, who should maintain records of their transactions and activities but can treat it as an investment for tax purposes if property is not held in a trade or business. All maps, costs and expenses to substantiate any claimed deductions must be kept on record, as well as separate cost accounts for road construction and drainage structures. Further, records must be kept for each unique stand identifier.
Below, we present a table that will help you understand how to fill out Form T (Timber).
| Form Name | Information Required | Details |
|---|---|---|
| Form T (Timber) | Instructions for Form T (Timber) | Instructions for providing information on timber accounts when a sale or exchange of timber has occurred during the tax year using Form T (Timber). |
Do You Need to File Form T (Timber) Each Year?
You are required to file Form T if you claim a deduction for depletion of timber, elect under section 631(a) to treat the cutting of timber as a sale or exchange, or make an outright sale of timber under section 631(b). You do not need to file Form T if you have an occasional sale of timber (one or two sales every 3 or 4 years), but you must maintain adequate records of these transactions and other timber-related activities. These records should include maps of your timber properties, as well as business records for any expenses incurred during the tax year for road construction and drainage structures.
Download the official IRS Form T (Timber) PDF
On the official IRS website, you will find a link to download Form T (Timber). However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form T (Timber)
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