Recovery After Tornado and Storm Damaged Forested Land
From the Alabama Extension System
The Alabama Forestry Commission has estimated that the April 27 storms caused damage to 200,000 acres of land with over $250,000,000 dollars of timber damage. Land owners need to evaluate the damage to their timber and review management options. The AFC recommends using a Registered Forester to evaluate timber stands, damage, and management options. Based on the damage assessment, the landowner need to decide if there is enough saleable timber to support a harvest and how badly the stand is damaged. Insect and disease activity lower the value of storm damaged timber so harvest should occur within a few months of the storm. Harvesting the storm damaged timber is not just for salvaging the timber revenue, but also for opening roads and firebreaks and making replanting less costly. Consideration must be given as to how the storm damaged areas might affect adjacent stands. Fire is a serious concern here as storm-damaged stands may have considerable fuel loads on the ground that during a dry part of the year can become a fire hazard. Heavy fuel loads can be responsible for intense fires that move into adjacent forests and cause serious damage to standing timber, or even structures in some cases. Whether an area is salvage logged or not, the installation of firebreaks and road clearing around the damaged area may be necessary. In addition to fire, insect outbreaks, particularly bark beetles can become a serious pest of stressed pine trees. If wind has removed a good portion of the needles of pine trees, even though the trees and branches themselves may not be damaged, the stress may cause the appearance of bark beetles which then can move into nearby healthy trees. These types of infection are often seen after major disturbances such as hurricanes and severe storms. Landowners are cautioned to keep a watchful eye on any pockets of beetle infestation.
A decision is needed on the short and long-term actions needed to regenerate the damaged areas. Fortunately, Alabama forests will regenerate themselves without any intervention whatsoever. However, inaction has consequences the landowner must consider. A landscape with no managed regeneration will undoubtedly have a considerable amount of hardwoods, take longer to reach any harvestable size, and be choked with weeds and brush for several years. This may or may not be what the owner desires.
Storm damaged timber may qualify the owner for a casualty loss deduction for income tax purposes. Unfortunately, the loss is not the fair market value of the timber damaged but the lesser of (1) the difference in the value before and after the event or (2) your "basis" in that timber. The basis in your timber is generally your investment in the timber. Typically when land is purchased, gifted, or inherited, the value of the property is divided between the bare land and the timber growing on that land.
The IRS recently released "Timber Casualty Loss Audit Techniques Guide" which provides instructions to IRS personnel who are auditing returns that claim timber casualty losses. Additional resources that may be helpful are listed below.
The Impact of Casualty Losses on Forestland Owners by Dr. Robert Tufts
Timber Casualty Loss Audit Techniques Guide from the IRS
Alabama Extension System Http://www.aces.edu