For federal income tax purposes, the cost basis of pre-merchantable plantations is the cost of establishment, including replanting or reseeding plus site preparation, planting, release, equipment depreciation, as well as a portion of the supervising forester’s salary.

When the stand reaches merchantability (usually about 15 years for planted pine), convert the dollars per acre for site preparation and planting to get the dollar-worth of the total tons per acre. Divide the total regeneration costs by the number of tons per acre, and you get your depleted value of each merchantable ton.