Title: Florida forest steward
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Title: Florida forest steward
Physical Description: Serial
Language: English
Creator: Institute of Food and Agricultural Sciences, University of Florida
Publisher: Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: Spring 2005
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Bibliographic ID: UF00090040
Volume ID: VID00035
Source Institution: University of Florida
Holding Location: University of Florida
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The Florida Forest Steward

A Quarterly Newsletter for Florida Landowners and Resource Professionals


Volume 11, No. 4


Spring 2005


Happy 2005!

We hope you and yours had a great
Holiday season and we would like to see
more of you at our Forest Stewardship
workshops and tours in 2005. This issue
will include some
important In this issue:
information for you
to consider when Timber Tax 1
preparing your Highlightsof
Workshops
income tax return for Timber Price
the 2004 year. We Need a Mana
will also share the Upcoming Pr
highlights of our
workshops on
invasive exotic plants and their control,
along with the usual timber price update
and upcoming events.

Timber Tax Tips for 2004

Each year Larry Bishop and John
Greene, USDA Forest Service Taxation
Specialist and Research Forester,
provide us with an updated summary of
tax tips for forest landowners. It was
discovered that the first version of these
tax tips for the 2004 year, released on
December 10, did not list FLEP as an
excludable federal cost-share program.


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or^^H


That version was corrected on December
14, and the Timber Tax Tips now list the
Forest Land Enhancement Program is
listed as an excludable cost-share
program.

The Bishop and Greene
summary is intended to
inform you of some of
2004 the things to keep in
SExotic Plants mind when preparing
your Federal income
Plan? tax return for the 2004
tax year, particularly if
you incurred any costs,
revenues or cost-share
payments associated with timberland
management. This is not exhaustive and
we strongly recommend consulting other
sources for a more comprehensive
treatment of this topic. Some useful on-
line resources are provided at the end.

Your Basis and Tax Records

Part of the price you receive from a
timber sale is taxable income and part is
your investment, or basis, in the timber
sold. The original cost of purchased
timberland, or the value of inherited
land, should be


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allocated to land, timber, and other
capital accounts. Then, adjust the basis
in each of the accounts up for new
purchases or investments and down for
sales or disposals. Keep good records,
including a written management plan,
map, and documents supporting current
deductions six years beyond the date the
return is due. The basis and timber
depletion should be reported on IRS
Form T (timber), Part II. Note that Form
Twas recently revised be sure to use
the new form.


Passive Loss Rules

Under passive loss rules you can be
classified in 1 of 3 categories: (1)
investor, (2) passive participant in a
trade or business, or (3) active
participant (materially participating) in a
trade or business. You are materially
participating if your involvement is
regular, continuous, and substantial.
Generally, active participants get the
best tax treatment of deductible
expenses, but you must show this with
thorough records. Keep records of all
business transactions related to
managing your timber stands and other
business activities such as landowner
meetings. Odometer readings to and
from landowner meetings, canceled
checks for registration fees, and copies
of meeting agendas are some examples
of documentation of meeting attendance.

If you are an active participant in a
timber business you must dispose of
your timber under the provisions of
Section 631 to qualify for capital gains.
This means that timber must be sold on a
pay-as-cut or "cut and convert" basis
rather than lump sum. Note: Lump sum
timber sales will qualify for capital gain


treatment under section 631 beginning
in 2005.

Reforestation Tax Credit and
Amortization

If you reforested before October 22,
2004, you can claim a 10% investment
tax credit for the first $10,000 spent for
reforestation. You can also deduct
(amortize) all of your 2004 reforestation
costs, up to $10,000.00, minus half the
tax credit taken, over the next 8 tax
years.

If you reforested after October 21, 2004,
the rules are now different. The
American Jobs Creation Act of 2004
repealed the reforestation tax credit, but
you can now deduct the first $10,000 of
qualified reforestation expenses incurred
after October 21. You can also amortize
over the next 8 years all reforestation
expenses in excess of $10,000 incurred
after October 21, 2004.

Elect to take the reforestation tax credit
on Form 3468, transfer it to Form 1040,
and elect to amortize reforestation
expenses on Form 4562. Election to
amortize must be made on a timely tax
return for the year in which the
reforestation expenses were incurred.
Passive owners may not be eligible for
this credit and amortization.

Capital gains and Self-employment
Taxes

You could pay significantly more in
taxes if you report timber sale income as
ordinary income rather than as a capital
gain. Also, capital gains are not subject
to the self-employment tax, as is
ordinary income. The net self-
employment tax rate for 2004 is 15.3%









for self-employed income of $400.00 or
more. To qualify for long-term capital
gains treatment, timber sold after
December 31, 1997 must have been held
longer than one year.

Cost-share Payments

All or part of the cost-share payments
received in 2004 under any of the
Federal or State cost-share programs
must be reported. Here are the options:

1 Include the payments as income and
then recover the part that you pay plus
the cost-share payment through the
amortization and reforestation tax credit
described above.

2 Exclude the excludablee portion"
from income if certain conditions are
met:
a the cost-share program has to be
approved for exclusion by the IRS and
b the maximum amount excludable per
acre is the greater of the present value of
$2.50 per acre or the present value of
10% of the average income per acre for
the past 3 tax years.


Cost-share programs approved for
exclusion by the IRS include the
Forestry Incentives Program,
Stewardship Incentives Program, Forest
Land Enhancement Program, Wetlands
Reserve Program, Environmental
Quality Incentive Program, and the
Wildlife Habitat Incentive Program. If
you decide to exclude, you must attach a
statement to your return that states
specifically what cost-share payments
you received, that you choose to exclude
some or all of them, and how you
determined the excludable amount.


Conservation Reserve Program (CRP)

If you planted trees during 2004 under
CRP you must report your annual
payment as ordinary income, but cost-
share payments are now excludable.
Follow the procedures above to
determine the excludablee portion" of
your CRP cost-share payment.

Casualty Losses

A casualty loss must result from an
event that is identifiable, damaging to
the property, and sudden or unexpected
or unusual in nature (e.g., wildfires and
storms). Your claim for casualty losses
cannot exceed the adjusted basis minus
any insurance or other compensation.
Note that the IRS has ruled that losses
resulting from drought or beetles
generally do not qualify for a casualty
loss deduction because they are not
sudden, but they may qualify for a
business- or investment-loss.

Management and Maintenance
Expenses

An IRS Revenue Ruling issued this year
(2004-62) clarified that the cost of post-
establishment fertilization is a deductible
management expense. It is usually best
to itemize your annual management
expenses during the tax year they are
incurred, although the amounts that can
be deducted depend on your tax category
(investor, active, passive). If it is not to
your advantage to itemize deductions for
2004 you should capitalize these
expenses.

Proper tax planning is a tedious but
important part of timberland
management. We strongly recommend
contacting a professional tax advisor to









help you with this task if you are
uncertain of the procedures.

Timber Tax Resources on the Internet

"The Forest Landowners Guide to the
Federal Income Tax" (Ag. Handbook
No. 718) provides a thorough overview
of timber taxes. You can access this,
"Tax Tips for Forest Landowners for the
2004 Year", and other publications on-
line at the USDA Forest Service Forest
Taxation Web site at
www.fs.fed.us/spf/coop/programs/loa/ta
x.shtml.

See the National Timber Tax Web Site
for a comprehensive treatment of timber
taxes at www.timbertax.org.

IRS publications and forms are available
at www.irs.gov.


Workshop Highlights: Invasive
Exotic Plants and Their Control

Last summer we held a workshop series
focusing on invasive exotic plants and
how to control them. As with most of
our Stewardship workshops, we tried to
reach different parts of the state with this
program since different regions have
varying problems with pest plants.
Several species, like cogongrass, are a
big problem everywhere.

The Problem

An exotic plant is one that was
introduced, purposefully or accidentally,
to a location outside of its natural range.
Invasive exotic plants are those that are
expanding their range in native plant
communities. Without the predators that
control their expansion in their home


range, they are rapidly taking over many
natural areas, reducing biodiversity and
wildlife habitat and altering ecological
systems. An estimated 1.5 million acres
of Florida's remaining natural areas are
threatened by invasive exotic plants.
Needless to say, these plants pose a
significant challenge to landowners
trying to conserve or restore native plant
communities on their properties.

Control Strategies

Well, Jackson County Extension Agent,
Clyde Smith, put it best when he said,
"Kill them! Kill them all!" It's a hard
pill to swallow but the only way out of a
problem with invasive exotic plants is to
get rid of them. In many cases this is
easier said than done because these
plants are hardy and some treatments
you think might work actually could
make the problem worse!

Mechanical Treatments:
Removing plants, seeds or other
reproductive structures by hand
can be effective but this is
usually excessively labor
intensive and only feasible for
small problems.
Shredding and mulching can
provide access but usually does
not lead to long-term control.
This will often spread the plants
and leave roots to resprout.
Tillage can control several
species but will spread others
(like cogongrass), unless tillage
is combined with other
treatments.


Fire:
*0


Prescribed burning may help
with access but favors many
invasive species (like









cogongrass!). Know the plants
you are trying to control and their
tolerance of fire.

Chemical Treatments:
Herbicide treatments are commonly the
most effective means to control the most
troublesome invasive exotic plants but
follow-up treatments and continuous
monitoring are usually required for
success.

Application methods:
Foliar usually low
concentrations of herbicide on
the foliage.
Stem injection (hack and squirt)
for larger stems, 1 hack per 2-3
inches of diameter, higher
concentrations of herbicide, 1
squirt per hack.
Basal treatment for many small
stems, spray stem with higher
concentration of herbicide with
penetrating oil and dye.

Biological Control:
Biological control is the science of
introducing the specialized natural
enemies that often limit the density of
invasive exotic plants in their native
ranges. This process involves surveys in
the plant's area of origin to discover
candidate natural enemies, studies on
their biology and host specificity, release
and evaluation of their impacts on the
target plant. The U.S. Department of
Agriculture's Animal and Plant Health
Inspection Service (APHIS) is
responsible for controlling introductions
of species brought into the United States
for biological control of plants, in
accordance with the requirements of
several plant quarantine laws, the
National Environmental Policy Act, and
the Endangered Species Act. Much


testing is necessary to be sure the
introduced "solution" is not a problem
for native species.
Some have been released and
shown some success: snout
beetle and melaleuca psylid for
melealeuca control, Brazilian
peppertree seed wasp for control
of that plant.
Some have had success in
experimental trials: Bipolaris
fungus on cogongrass, tropical
soda apple leaf beetle and flower
bud weevil.

What Are the Worst Plants and How
Do You Get Rid of Them?

It was concluded at these workshops that
the biggest current threat to natural areas
in the Southeast is probably posed by
cogongrass. It loves mechanical
treatments and fire and requires multiple
herbicide treatments to control. Space
will not allow us to include every
invasive exotic plant we discussed, but
here are five of the worst and how to
control them*.

Cogongrass
This weed is listed as one of the
top 10 worst in the world and can
spread rapidly, covering
expansive areas if left
unchecked. Early detection and
aggressive control is our best
strategy to keep this invasive
exotic grass from dominating
Florida's natural landscape.
Foliar spray 1% Arsenal or
Chopper in the fall.
The uptake of the herbicide can
be enhanced by mowing 6 weeks
to 2 months before application.
Be certain to thoroughly clean
and wash any mowers or other









equipment in a safe area, before
using them in other places.
*Follow-up treatments will likely
be needed in 1 or 2 subsequent
years. Spot treatments of small
patches or strips along road
rights-of-way can save greatly on
future costs.

Japanese climbing fern
Foliar spray with 2% Accord, or
1% Arsenal AC, or 1-2 dry oz
Escort per acre in July October.

Kudzu
Foliar spray with 2% Roundup or
3 oz/acre Escort when actively
growing; or 2% Garlon 3A in
early spring.
For vines < 2 inches in diameter,
basal spray Garlon 4 as a 20%
solution in oil mix in January-
April.
Graze or mow for access and
increased chemical uptake.

Air Potato
Pick up or dig up bulbils
("potatoes") in winter, cut and
remove vines.
Foliar spray 1-2% Roundup +
Escort.
Cut stem and apply 50% Garlon
3A or 10% Garlon 4.
Basal spray stems with 10%
Garlon 4.

Tropical soda apple
On non-crop land, foliar spray
2% Garlon 4 or 2% Arsenal AC.
On pastures, foliar spray 2%
Remedy.
Foliar spray 3% Roundup.
Collect and destroy fruit if
possible.


*Reference to commercial products or
trade names is made with the
understanding that no discrimination is
intended against other products that may
also be suitable and appropriately
labeled. Treatment recommendations
involve general herbicide prescriptions
that have yielded acceptable levels of
control in field trials. Always follow the
herbicide label.

The list of invasive exotic plants is very
long and seems to be growing. We will
be dealing with this problem for a very
long time, if not indefinitely. However,
resources abound on the Internet and
through the various state and Federal
organizations that are cooperating to
address this problem. A valuable, and
virtually exhaustive, resource available
to all with a computer is the CD-ROM,
"Invasive Plants of the Eastern United
States: Identification and Control". It
includes hundreds of plant descriptions,
background, and control prescriptions.
This product is free and can be ordered
by calling the USDA Forest Service
Forest Health Technology Enterprise
Team at 304-285-1566. Much of the
information in this package is available
on-line at www.invasive.org/.


Many thanks to all the cooperators who
made this workshop series possible,
especially Andrea Van Loan, Florida
Division of Forestry; Dr. Ken
Langeland, UF-IFAS Department of
Agronomy; Clyde Smith, UF-IFAS
Jackson County Cooperative Extension
Service; Dr. James Cuda, UF-IFAS
Department of Entomology and
Nemotology; Dr. Paul Pratt, USDA
Agricultural Research Service Invasive
Plants Research Lab, and all the County
Extension Faculty and Staff involved.









Timber Price Update

This information is useful for observing
trends over time, but does not
necessarily reflect current conditions at a
particular location. Landowners
considering a timber sale would be wise
to let a consulting forester help them
obtain the best current prices. Note that
price per ton for each product is included
in parentheses after the price per cord.

Stumpage price ranges reported across
Florida in the 4th Quarter 2004 Timber
Mart-South (TMS) report were:

* Pine pulpwood: $14-$28/cord ($5-
$11/ton), [ from 3rd Quarter 2004
* Pine C-N-S: $59-$77/cord ($22 -
$29/ton), I
* Pine sawtimber: $94 $123/cord
($35 $46/ton), T
* Pine plylogs: $106 $122/cord ($40
$45/ton),
* Hardwood pulpwood: $10 $21/cord
($3 $7/ton), [

A more complete summary of 4th
Quarter 2004 stumpage prices is
available at your County Extension
office. See forest2market.com for
weekly, South-wide, per-ton price
updates for the major pine and hardwood
timber products.

Trend Report

The best news in the 4th Quarter was the
price of sawtimber, for which south-
wide average prices increased 4.5
percent from the 3rd Quarter 2004. The
rest of the products stayed about the
same or decreased significantly.
Florida's average hardwood pulpwood
price had the largest decrease, dropping
about 21% from the 3rd Quarter. This


was not in line with the south-wide
hardwood pulpwood average as wet
weather in the western part of the region
resulted in higher prices there.

Need a Forest Management
Plan?

Many forestry, natural resource
conservation, and wildlife seniors at the
University of Florida take Dr. Doug
Carter's Integrated Forest Management
class, a capstone course that provides a
hands-on opportunity to write multiple-
use forest management plans. For the
last few years, Dr. Carter's students have
been assigned the task of writing
Stewardship Management Plans for
private landowners in conjunction with
valuable assistance from Dave Conser,
Alachua County Forester and the FWC
Stewardship Biologist. An article about
this appeared in a past issue of the
Florida Forest Steward (vol. 8, no. 2).
This has been a valuable practical
experience for students and the
landowners have benefited by having a
high-quality Stewardship Plan written on
a very timely basis. Dr. Carter notes that
"this is the best opportunity seniors have
to take the full complement of what they
have learned at UF and put it into
practice." If you have property in north
central Florida and would like to have a
student-prepared Forest Stewardship
Management Plan written for your
property, contact Dr. Carter at 352-846-
0893 or drcart@ufl.edu.

Upcoming Events

Workshop in Alabama- Renewing the
Forest: Hurricane Recovery; Ag-
Science Center Building, Brewton, AL;
February 17, 2005; 3:00 PM CST. This
program is designed to provide









information to aid landowners in the
process of recovery and renewal of
forests following the 2004 hurricane
season which resulted in extensive
damage in Florida and Alabama. To
Register, Call or email Bessie Buchanon
in Alabama (334-844-1002,
buchabz@auburn.edu) or Robin Vickers
in Florida (850-983-5216 x 13,
rvickers@ufl.edu) to register by
February 14, 2005. Program cost of $10
will cover the cost of meal and materials.
CFE's will be offered for foresters.

Forest Stewardship Property Tour,
February 18, 2005, at the forest
property of James Pochurek, Marion
County. Announcement is in the mail.
Contact Chris Demers at 352-846-2375
or cdemers@ifas.ufl.edu to register.

Forest Stewardship Workshop Series:
Vegetation Management for Multiple
Objectives. Focus will be on herbicide
uses. Announcements with more details
will be mailed. Questions about the
program can be directed to Chris at 352-
846-2375. Mark your calendars:

April 19, 2005: UF-IFAS West Florida
Research and Education Center in
Milton and Jay, FL. Call Robin Vickers
at 850-983-5216 x.113 to register.


April 21, 2005: UF-IFAS North
Florida Research and Education
Center in Quincy, FL. Call the REC at
850-875-7115 to register.

May 5, 2005: UF-IFAS Suwannee
County Cooperative Extension Office in
Live Oak. Call the Suwannee County
Extension Office 386-362-2771 to
register.


For more information about Florida's Forest Stewardship Program and forest management visit the
Florida Forestry Information Web site at www.sfrc.ufledu/Extension/ffws/ffwshome.htm


A University of Florida Cooperative Extension Service and Florida Division of Forestry joint project:

Chris Demers (editor), School of Forest Resources & Conservation, UF, P.O. Box 110410, Gainesville, FL 32611-
0410, (352) 846-2375 or cdemers@.ifas.ufl.edu
Alan Long (co-editor), School of Forest Resources & Conservation, UF, (352) 846-0891 orAJLon-, u i ti ...i t
Ruthie Cole (co-editor), Florida Division of Forestry, 3125 Conner Blvd, Tallahassee, FL 32699-1650, (850) 414-
9912 or coler@doacs.state.fl.us
ChuckMcKelvy (co-editor), Florida Fish and Wildlife Conservation Commission, 3125 Conner Blvd, Tallahassee,
FL 32699-1650, (850) 414-991 lor Chuck.McKelvy@MyFWC.com




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