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Can I deduct the loss of trees on my property?

September 13, 2006


From:  Paul
Date:  Fri, 07 Apr 2006

I lost a lot of trees in a storm at our residence, and they were not covered by insurance. Can I deduct some amount for them on my personal income tax returns? The same storm flattened about 25 acres of timberland that I was about to harvest last winter. Is this deductible on a tax return for the farm?

Answer

Date:  Wed, 14 Jun 2006

Hello Paul,

Trees for a personal residence are considered part of the whole property. The casualty loss is measured by the excess of the fair market value of the property before the storm over the fair market value after the storm, limited to the tax basis of the property. You might need to get an appraiser involved. The government allows clean up costs, including removing the trees, pruning damaged trees and replanting as an indication of the amount of the loss.

The loss of trees raised for harvesting is different. The loss is based on the tax basis of the trees.

I recommend that you get professional help to report these deductions.

Good luck!
Mike Gray

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Can I deduct the loss of trees on my property?

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