Home Columnist FORESTRY UPDATE by Gary Allen Burns 4-20

FORESTRY UPDATE by Gary Allen Burns 4-20


The loss of ornamental trees on residential property can qualify for a casualty loss for federal income tax purposes. The casualty must be sudden, unexpected or unusual and the deductible loss is reduced by any insurance received. While the IRS usually does not allow casualty loss for insect damage to timber, it has allowed a casualty loss deduction for the death of ornamental trees from an epidemic southern pine beetle attack on residential property. An appraisal is required for the value of the entire property before and after the casualty. Additional deduction limits ($100 floor and ten percent rules) apply to personal-use property, such as the residence. Casualty loss is reported on Form 4684, and the appraisal fees are deductible on Schedule A as miscellaneous expenses. Miscellaneous expenses are subject to a two percent adjusted gross income reduction.

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