26 USC 194 - Treatment of reforestation expenditures

U.S Code last checked for updates: Jan 18, 2025

§ 194.

Treatment of reforestation expenditures

(a)

Allowance of deduction

(b)

Treatment as expenses

(1)

Election to treat certain reforestation expenditures as expenses

(A)

In general

(B)

Dollar limitation

The aggregate amount of reforestation expenditures which may be taken into account under subparagraph (A) with respect to each qualified timber property for any taxable year shall not exceed—

(i)

except as provided in clause (ii) or (iii), $10,000,

(ii)

in the case of a separate return by a married individual (as defined in section 7703), $5,000, and

(iii)

in the case of a trust, zero.

(2)

Allocation of dollar limit

(A)

Controlled group

For purposes of applying the dollar limitation under paragraph (1)(B)—

(i)

all component members of a controlled group shall be treated as one taxpayer, and

(ii)

the Secretary shall, under regulations prescribed by him, apportion such dollar limitation among the component members of such controlled group.

For purposes of the preceding sentence, the term “controlled group” has the meaning assigned to it by section 1563(a), except that the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1).

(B)

Partnerships and S corporations

(c)

Definitions and special rule

For purposes of this section—

(1)

Qualified timber property

(2)

Amortizable basis

(3)

Reforestation expenditures

(A)

In general

The term “reforestation expenditures” means direct costs incurred in connection with forestation or reforestation by planting or artificial or natural seeding, including costs—

(i)

for the preparation of the site;

(ii)

of seeds or seedlings; and

(iii)

for labor and tools, including depreciation of equipment such as tractors, trucks, tree planters, and similar machines used in planting or seeding.

(B)

Cost-sharing programs

(4)

Treatment of trusts and estates

(5)

Application with other deductions

(d)

Life tenant and remainderman

(Added Pub. L. 96–451, title III, § 301(a), Oct. 14, 1980, 94 Stat. 1989; amended Pub. L. 97–354, § 3(g), Oct. 19, 1982, 96 Stat. 1689; Pub. L. 99–514, title XIII, § 1301(j)(8), Oct. 22, 1986, 100 Stat. 2658; Pub. L. 108–357, title III, § 322(a)–(c)(4), Oct. 22, 2004, 118 Stat. 1474, 1475; Pub. L. 109–135, title IV, § 403(i)(1), Dec. 21, 2005, 119 Stat. 2624.)

cite as: 26 USC 194