Reforestation Tax Incentive Impacts on Financial Returns of Loblolly Pine Plantations for Nonindustrial Private Forest Landowners in Mississippi

Abstract

Forest plantation investment returns depend not only on survival and growth rates, but also on costs and revenues associated with various practices. Beyond that, tax-related issues are very important, but are often not addressed and thus most forest financial assessments can be defined as before-tax. Mississippi landowners can reduce reforestation cost burdens through two important tax-related opportunities. Firstly, the Federal reforestation deduction and amortization provisions, and secondly the State-based reforestation tax credit. Impacts of these two income tax reduction opportunities on unthinned loblolly pine (Pinus taeda) financial returns were examined for three planting densities (454, 519, and 605 seedlings per acre) for an 80-acre clearcut with a site index of 65 feet (base age 25) at age 26. For Federal tax purposes, a landowner classified as an investor within the 22 percent Federal income tax bracket was assumed. Whether before- or after-tax assessment, the financially optimal planting density was 454 seedlings per acre.

Parent Publication

• Proceedings of the 22nd Biennial Southern Silvicultural Research Conference

Citation

VanderSchaaf, Curtis L.; Li, Yanshu. 2024. Reforestation Tax Incentive Impacts on Financial Returns of Loblolly Pine Plantations for Nonindustrial Private Forest Landowners in Mississippi. In: Bragg, Don C.; Oswald, Brian P.; Koerth, Nancy E., eds. Proceedings of the 22nd biennial southern silvicultural research conference. Gen. Tech. Rep. SRS-274. Asheville, NC: U.S. Department of Agriculture, Forest Service, Southern Research Station: 341–350. https://doi.org/10.2737/SRS-GTR-274-Pap54.