Have you sold timber off your land?

KsHusker

Active member
My wife and I purchased a small chunk of ground next door to where we live now - farmland, waste, timber - we will build a house on it but I had the inkling before we bought it the lumber was worth some money.

Had a timber buyer come out and I inked a deal with them - simple one - they can harvest the walnuts and burr oaks - we get 60% of what they sell it for - as an incentive got a 5 figure down payment with no strings. Per a couple people I talked to this seems to be normal.


From the little info I can find on the outfit they seem to be legit and have worldwide buyers.


Anyways curious if anyone here has sold timber from their property -- also how it worked with taxes.

(***I'm not seeking tax advice and have an accountant I work with - he's researching the issue to be certain - but always curious of others real life experience -- mine thought it may be treated as a royalty - I would prefer a workaround and thinking I should just have my LLC paid)

TIA -- this is in KS if it matters.
 
I haven’t sold any timber. I have purchased timber and advised landowners in my career.

Is the fellow that purchased the timber a certified forester? If not, did you get advice from a forester?

With regards to taxes it is best to have a tax basis. If you haven’t owned the property for several years the basis might substantially reduce your tax liability.
 

Kismet

UPH Guru
Only thing I can contribute is to get some sort of guarantee that the harvesting will be cleaned up afterwards.
I've seen sites where who ever did the cutting left limbs, debris, and enormous gouges in the earth from their equipment.

Used to be some foresters who used mule teams on harness to selectively remove trees.

Congratulations and best wishes.
 

david0311

Active member
Too late now but—I’ve sold timber before and always-always had a independent forester cruise the land before any firm deals were made.
‘However if you trust them and they have a good reputation it may work out-
 

Matt D

Active member
Too late now but—I’ve sold timber before and always-always had a independent forester cruise the land before any firm deals were made.
‘However if you trust them and they have a good reputation it may work out-
Same here.
 

GetTothePoint

New member
Only thing I can contribute is to get some sort of guarantee that the harvesting will be cleaned up afterwards.
I've seen sites where who ever did the cutting left limbs, debris, and enormous gouges in the earth from their equipment.

Used to be some foresters who used mule teams on harness to selectively remove trees.

Congratulations and best wishes.
Like he said... we've done it twice to clear up some pasture with timber we took over. Second time we took a little less money to have them clean up their mess better as the first place was left in a royal mess. They will leave everything but the main trunk and you'll be left with the messes and if wet when they cut you'll be fixing ruts.
 
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KsHusker

Active member
I haven’t sold any timber. I have purchased timber and advised landowners in my career.

Is the fellow that purchased the timber a certified forester? If not, did you get advice from a forester?

With regards to taxes it is best to have a tax basis. If you haven’t owned the property for several years the basis might substantially reduce your tax liability.

Certified forester and on the KS Forestry lists and buyers list.

I gambled and went with my gut - have heard 2-3 people talk good about the company.

Just bought the property in June -

Good looking out on the ruts - I'm concerned about that - I live right here so will be keeping a close eye - I'd be expecting the brush to be stacked and not all over - they also claimed they'd help me clean up a creek crossing so I can put a concrete cap on it -- if they do what they say they will I'll be ahead even with the cleanup - it will save wear and tear on my skid loader tearing down trees and brush as I really want a lot of trees gone. Plus if they clean up the creek crossing and make it crossable by vehicle again that improves the property substantially - I'll have to invest some money in the concrete work - but about 10 acres and the most secluded part is cut off from access unless the creek is running low.

My vision is that the trails they'll cut along with me putting a 3 deer huts even though I hate them and establishing better habitat is that I'll have a place for people to murder and thin out our white tail deer herd around here - and whenever we move away I'll sell it to an urbanite from KC, Topeka, Lawrence etc for a decent profit. We shall see in a few years if that pans out...ha. I just want fishing holes, trails and to see if I can get 3 or 4 covies of quail.
 
Certified forester and on the KS Forestry lists and buyers list.

I gambled and went with my gut - have heard 2-3 people talk good about the company.

Just bought the property in June -

Good looking out on the ruts - I'm concerned about that - I live right here so will be keeping a close eye - I'd be expecting the brush to be stacked and not all over - they also claimed they'd help me clean up a creek crossing so I can put a concrete cap on it
It sounds like you are dealing with a reputable company.

It is very important that you express what your objectives are to the procurement forester.

Be sure to explain your desire about stacking the tops and brush to the crew that is actually doing the harvest. Take a look at some recent and older logging jobs in the area that this crew has completed. That will give you an idea what to expect.

Logging is dangerous work. The company should have worker‘s comp and liability insurance.

It can look pretty rough when completed. I’m sure KS has best management practices for logging. The crew can help you reach your objectives.

Consult a CPA or tax professional regarding the taxes. I have established a tax basis for several landowners. Since you just purchased the property I believe that you may have capital gains tax on the entire proceeds of the sale.

Walnut and white oak species are hot in the domestic and export market. You are having this harvested at a good time in that regard.

Best of luck in reaching your financial and habitat objectives.
 

Bump

New member
When I sold timber on my newly purchased farm, my CPA explained like this. If you bought a truck loaded with water melons for $500, and then sold the water melons for $250, you would be left with a $250 truck. You paid $250 for the melons and sold them for $250. You made no profit. However, if you sell the truck the same year for $500 then you have a $250 profit and you must pay taxes on that profit as regular income. In other word, you will pay taxes when you sell the farm.
 

KsHusker

Active member
When I sold timber on my newly purchased farm, my CPA explained like this. If you bought a truck loaded with water melons for $500, and then sold the water melons for $250, you would be left with a $250 truck. You paid $250 for the melons and sold them for $250. You made no profit. However, if you sell the truck the same year for $500 then you have a $250 profit and you must pay taxes on that profit as regular income. In other word, you will pay taxes when you sell the farm.

If we can work on a tax basis that's awesome - of course I'm still waiting for his research on the issue - Im hoping it works out that way vs a Royalty -- I LOVE deferred taxes and provided the gov't doesnt do away with 1031s etc there's always a way to avoid them.

I'm also planning on platting the land and adding 7 or more buildable lots we can sell off at a later date. It's a PITA to find a land surveyor that will work right now - they're all covered up in work about like GC's. Been learning the inner workings of our county and city planning dept and learning the local politics. At the same time I'm trying to get our township to pave about 400' of road frontage and buttering them up and selling an easement on the front of the property that has a ton of trees and a privacy screen where we live now for a road project. Juggling a lot of balls but the projects are all linked together.
 
It is always a good idea to have forested land appraised upon purchase to establish a basis.

You should only have to pay tax on the annual growth from the date of purchase.
 

KsHusker

Active member
It is always a good idea to have forested land appraised upon purchase to establish a basis.

You should only have to pay tax on the annual growth from the date of purchase.
If I wouldnt own it long enough or live long enough for it to be logged again would that matter?

Guessing that would apply to "timber" type properties - and not where natives are growing?
 

KsHusker

Active member
Well the logging company started logging on a neighbors land close by - I knocked on their door as they lived a mile from the property being logged and met them for the first time and obtained permission to drive around and check on their work.

Pretty happy with what I saw. Just talked to the logger today - guess they bought rights surrounding our land for quite a ways so they'll be in the area a while.

On the land I drove through it cleaned it up a lot - place was a fricking jungle that you couldnt see through plugged up with honeysuckle. Found a 200-300 year old or who knows truly how old Oak tree -- Good Lord that thing probably had to be around way before the pioneer days even, you just RARELY see one that HUGE- sucker was HUUUUUGGGGEEEEE -- I asked the logger about that one when we talked this morning - said it's to the point it would be no use to them so I guess they are leaving it -

I dont know why - but I am super fascinated by those ancient (to me) trees. My 7 yo son was mad at me from being disciplined earlier the night we drove around lol - so he was not in the mood to get out and get his photo taken beside the tree or to marvel at it.

Excited to get a 23 acre parcel of the 80 that is mostly worthless cleaned up when they come in and get some better habitat in.

If I want with the brush they dont take thats all piled up there'd be lots of good firewood easily accessible as well. plenty of big limbs to get good fireplace logs out of.

I'm 99% sure in the beginning of May I saw a mountain lion stalking a tom turkey in the fallow bean field - I could relay the story later - but a neighbor without ever knowing my story claimed they almost hit one a mile away about 2-3 weeks ago -- if there truly is one in the area hoping getting this stuff cleaned up will convince said animal they can move on but who knows -- it's pretty wooly all around and if something wanted to stay hidden all the time it's easy to do. Heres what I can say about said animal I think was a lion -- there was PLENTY of daylight - about 400 yards away with a perfect vantage point for me and my son - I've seen a gazillion coyotes and coyotes do not lay flat on their stomach in the wide open in henbit/crab grass that is 3-4 inches tall and 20-30 yards from said turkey without turkey ever knowing, turkey at some point after displaying and drumming etc - got nervous as hell - you could tell by the body language and eventually figured something was off - he didnt sprint out of there - but just immediately left when it sensed something was wrong. After that the animal stood up and walked slowly to where the turkey was and then slinked off into the woods where it went. I've seen a lot of bobcats as well-- Coyotes do not have as big of a neck/front end as I saw when the animal stood up - and it clearly had a tail as long as the body hence why I was thinking when it stood up it may be a coyote - but if it was and I had mistaken identity the weirdest coyote I've ever seen - also there was a deer feeding along the tree line about 100-150 yards away completely oblivious to said animal. The one time I wish I had my binos with me as that would have given me 100% clarification what it was - I've got pretty damn good eyesight for a 41 yr old - and better than a lot of people younger than me before I'm called crazy lol. Watched said animal for 10 mins at least - son got annoyed at me we sat on the road so long and didnt keep riding our ATVs. The land is pretty awesome in that the road sits up high and everything gently slopes down to a bottom area/tree line/creek drainage - so all wide open -- when we're on the road there is a well manicured tree line with branches 15 ft up at least trimmed to keep clear of the road (dead end road with little traffic) - so breaks up our outline but we can see clear as day through them.
 
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matto

Active member
My dad allowed someone to harvest a short hedgerow for fenceposts many years ago. It was a very different, and less professional, operation than you're dealing with. Anyway, that guy did absolutely nothing to clean up the slash and took his time carting off the fenceposts that he cut. It ended up being about twice as wide and absolutely impenetrable after a couple of years of brush and volunteer trees growing up through the slash that was just left. Shame on us for allowing it to happen, but I had very young kids at the time and my dad didn't have the energy to address it.

On the plus side, after it got cut and before the regrowth got too tall and thick, a covey used to hang out there.
 

KsHusker

Active member
My dad allowed someone to harvest a short hedgerow for fenceposts many years ago. It was a very different, and less professional, operation than you're dealing with. Anyway, that guy did absolutely nothing to clean up the slash and took his time carting off the fenceposts that he cut. It ended up being about twice as wide and absolutely impenetrable after a couple of years of brush and volunteer trees growing up through the slash that was just left. Shame on us for allowing it to happen, but I had very young kids at the time and my dad didn't have the energy to address it.

On the plus side, after it got cut and before the regrowth got too tall and thick, a covey used to hang out there.

I've got a tracked skid loader - a big one - I'll keep the honeysuckle out and manage the piles left - for sure while I own it, wont get overgrown again -- for the hell of it if I get carried away I may rent a big track hoe and rip out all kinds of trees they dont take in the near future.

I guess he hasn't harvested on me yet - but am glad what they're doing on the neighbors who have larger acreage is a good job. Helping the farmer out also by giving them a good trail/road to the hay meadow back in the middle of the property.
 

KsHusker

Active member
Well they finally have logged and moved on -- right now the logs are just stacked up along the road ready for the logging semi to move them

156 or so trees - I think mainly walnut -- and one hackberry that was maybe a casualty or in the way of the other trees - plus lots of trails cleared etc -- I'm going to go through with my skid loader and the really big branches that are good for firewood pull them to the side so I can go and cut some up or let someone else do it - then pile the rest of the stuff along the nature trail fence (rails to trails) that splits our property in two to help keep people out and provide more of a barrier along the right of way line --

It's amazing how much this cleaned stuff up -- it will take me a few months of whittling away at it when I'm bored with the skid loader but this will improve the value considerably -- Loggers did what they said they would and were good about cleaning up - I was nervous about it but I guess this next part will see what happens - supposed to get the money from the logs on shares - so will see how that goes -- there's still about 15 acres I can't get to - but think I can now with my 4 wheeler - have to put in a solid low water creek crossing to get to them - the loggers could cross with their stuff but until they cleaned up the crossing wasn't passable with ATV until today -- that part was the most heavily treed


I've been like a little kid with this - I think a couple of the neighbors that wanted to buy the land dont like me or resent me taking out the trees -- I dont know - they wont wave anymore - oh well - in 2-3 years the property will be completely transformed. Once my stuff uploads from my phone to Amazon I'll post some photos - have been trying to semi document this as I'm assuming it's the only logging deal I'll be a part of.
 
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