Reforestation expenses are a long-recognized investment in forest establishment. Under IRC §194 (still active in 2025), a landowner may deduct up to $10,000 per Qualified Timber Property (QTP) in the current year and amortize any excess over 84 months using IRS fractions 1/14 (Year 1), 1/7 each in Years 2–7, and 1/14 (Year 8). The former federal 10% reforestation credit ended for expenditures after December 31, 2004, but some states maintain their own credits. The tool below models §194 and allows an optional state/historic credit input; if a credit is used, the amortizable base is reduced by one-half of the credit amount.
How to use this page
- Enter total qualifying reforestation costs for this tax year, the number of QTPs, and your starting tax year.
- If applicable, enter a state credit rate and its creditable base.
- Click Recalculate to generate the eight-year schedule, then Print for workpapers.
Reforestation Credit & Amortization Tool
§194 Current-year deduction up to $10,000 × QTPs; amortize the excess over 84 months (1/14, 1/7×6, 1/14).
Credit Federal 10% credit ended after 12/31/2004. Use credit inputs only for state programs or historic “what-if.” If a credit applies,
reduce the amortizable base by ½ × credit amount.
Inputs — Costs & §194
Current-year §194 deduction = min(costs, cap × QTPs). Excess is amortized.
Optional — State / Historical Credit
If a credit is used, the amortizable base is reduced by ½ × credit amount. Leave 0% if none.
Summary
| Tax Year | Fraction | Amortization | Cumulative |
|---|---|---|---|
| Total | $0 | $0 | |
Relationship to Capital Recovery
The §194 deduction and amortization operate alongside depletion, depreciation, and basis adjustments to ensure taxable income reflects only true economic gain—not a return of prior investment. Within the FRASS Capital Recovery framework, these schedules support accurate projections and defensible documentation for forest stewardship and appraisal practice.