FLORIDAForests - Spring/Summer 2017 - 17

FEATURE

TAXING MATTERS

THE TRUE MEANING OF LIFE IS TO
PLANT TREES, UNDER WHOSE SHADE
YOU DO NOT EXPECT TO SIT.

ONE GENERATION PLANTS THE
TREES, AND ANOTHER GETS
THE SHADE.

- Nelson Henderson

- Chinese proverb

BENJAMIN FRANKLIN ONCE noted
that nothing is certain except death and
taxes. More than 200 years later, the current clamor for tax reform has left a lot
of people in the forest industry feeling
very uncertain about what changes in the
tax code might mean to the generational
investments they make. Forest landowners love their land and enjoy owning it
for numerous reasons. However, growing
timber is a long-term, capital-intensive
pursuit. If it doesn't remain economically
viable, it is not sustainable. Changes in tax
treatment can have a significant impact
on the economic viability of this type of
long-term investment.
Case in point: John Alter of Alter-Bevis
Farms in Malone, FL.
When asked how changes might
impact his operation, Alter answered with
a laugh, "Like most Tree Farmers, I'm not a
tax expert. That's a question for my CPA."
More specifically, Alter is an awardwinning Tree Farmer. He and his wife,
Elizabeth, were honored as Florida's
Outstanding Tree Farmer of the Year in
2015.
The Alter-Bevis Farm property includes
the home site near Malone as well as 18
Tree Farm stands.

see the first penny in return. Sometimes
you feel like your trees should be sprouting dollar bills instead of pine needles."
Association Board Member John Alter

On the 600 acres managed as pine
plantations, the Alters grow traditional
pine species: long leaf, slash and loblolly. The property also includes 116
acres of wetlands that support 115-year
old cypress trees.
Portions of the land have been in the
family since 1855. Their timber ranges in
age from 47 years to seedlings planted
in 2015.
"I can't give you all the financial details,"
Alter continued his answer in a more serious vein, "but I can tell you this: Reform
can be great and it's certainly a buzzword
these days, but some parts of the tax code
do not need to be reformed. They need to
remain firmly in place."
"If money doesn't grow on trees," he
quipped, "it's not because we don't spend
enough on them. I believe proper land
management requires dedicated investment. On top of that, you have to remember that forestland owners' profit cycle from
their trees often takes decades before they

Florida Forests 17 Spring/Summer 2017

ANNUAL DEDUCTIONS
Current timber tax provisions allow
for an annual deduction for the costs of
growing and maintaining forests. This
enables landowners to invest capital in
things such as thinning, fertilization, fire
line maintenance, fence repair, competition monitoring and treatment - mechanical and/or chemical - and property taxes.
All this cash flow takes place throughout
the duration of the long growing cycle.
Capitalizing these costs over the long
holding periods required to grow timber
would greatly increase the economic cost
of proper forest management.
A separate provision also allows for
the deduction and amortization of reforestation costs.
"There is currently a $10,000 limit on
reforestation expenses," Alter noted.
"That would only cover roughly 30 or 40
acres of trees. Tree Farmers definitely
need to be able to deduct reforestation
costs, so keeping that provision is a must.
Increasing that limit would make a lot of
sense."



Table of Contents for the Digital Edition of FLORIDAForests - Spring/Summer 2017

Executive Outlook
President’s Message
Wildland Fires on the Rise
William Cook Inducted Into AG Hall of Fame
2017 Legislative Report
Forestry Day at the Capitol
Putting the Action in Political Action
Taxing Matters
An Audience With the President
2017 Florida Southern Pine Beetle Forecast
UF Sfrc Welcomes Terrell Baker
Snapshots
Products & Services Marketplace
Index of Advertisers/ advertisers.com
FLORIDAForests - Spring/Summer 2017 - Intro
FLORIDAForests - Spring/Summer 2017 - cover1
FLORIDAForests - Spring/Summer 2017 - cover2
FLORIDAForests - Spring/Summer 2017 - 3
FLORIDAForests - Spring/Summer 2017 - 4
FLORIDAForests - Spring/Summer 2017 - 5
FLORIDAForests - Spring/Summer 2017 - Executive Outlook
FLORIDAForests - Spring/Summer 2017 - President’s Message
FLORIDAForests - Spring/Summer 2017 - 8
FLORIDAForests - Spring/Summer 2017 - Wildland Fires on the Rise
FLORIDAForests - Spring/Summer 2017 - William Cook Inducted Into AG Hall of Fame
FLORIDAForests - Spring/Summer 2017 - 11
FLORIDAForests - Spring/Summer 2017 - 2017 Legislative Report
FLORIDAForests - Spring/Summer 2017 - 13
FLORIDAForests - Spring/Summer 2017 - Forestry Day at the Capitol
FLORIDAForests - Spring/Summer 2017 - Putting the Action in Political Action
FLORIDAForests - Spring/Summer 2017 - 16
FLORIDAForests - Spring/Summer 2017 - Taxing Matters
FLORIDAForests - Spring/Summer 2017 - 18
FLORIDAForests - Spring/Summer 2017 - An Audience With the President
FLORIDAForests - Spring/Summer 2017 - 20
FLORIDAForests - Spring/Summer 2017 - 2017 Florida Southern Pine Beetle Forecast
FLORIDAForests - Spring/Summer 2017 - 22
FLORIDAForests - Spring/Summer 2017 - UF Sfrc Welcomes Terrell Baker
FLORIDAForests - Spring/Summer 2017 - Snapshots
FLORIDAForests - Spring/Summer 2017 - 25
FLORIDAForests - Spring/Summer 2017 - 26
FLORIDAForests - Spring/Summer 2017 - 27
FLORIDAForests - Spring/Summer 2017 - Products & Services Marketplace
FLORIDAForests - Spring/Summer 2017 - 29
FLORIDAForests - Spring/Summer 2017 - Index of Advertisers/ advertisers.com
FLORIDAForests - Spring/Summer 2017 - cover3
FLORIDAForests - Spring/Summer 2017 - cover4
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