Form T (Timber): Forest Activities Schedule

Last reviewed: 2025-10-28

Use the Form T (Timber) — Forest Activities Schedule (Tax Year 2026) Tax Form Calculator Form T (Timber) — Forest Activities Schedule (Tax Year 2026) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 T Timber state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Form T (Timber) documents your timber accounts, basis, depletion, reforestation expenditures, and gains or losses from cutting or selling timber. It supports elections under sections 631(a) and 631(b), substantiates Section 194 deductions and amortization for reforestation, and ties land and timber movements across the tax year.

Who must file: File Form T if you (i) claim a timber depletion deduction, (ii) elect under section 631(a) to treat cutting as a sale or exchange, or (iii) make an outright sale of standing timber under section 631(b). Occasional sellers (one or two sales every 3–4 years) may be excepted, but keeping books/records is still required.
What Form T covers: Acquisitions (Part I), depletion computations by block (Part II), profit or loss from land and timber sales (Part III), reforestation and stand activities with Section 194 expensing/amortization (Part IV), and land ownership roll-forward (Part V).
Key definitions: Block is your accounting unit for timber with a single depletion basis; merchantable vs premerchantable timber; MBF (thousand board feet) and log rules; qualified timber property (QTP) for Section 194.
Evidence and measurement: Maintain acquisition cruises, growth adjustments, transfers (from premerchantable/deferred reforestation), and casualty adjustments. Your unit depletion rate is basis ÷ quantity in the block at year end before depletion.
Records to retain: Maps/legal descriptions, cruise reports, contracts (lump-sum or pay-as-cut), appraisals, cutting reports, scaling summaries, reforestation invoices, and state returns supporting federal positions.

Forest Activities Schedule
Name(s) as shown on return					Identifying number
Part I Acquisitions
1	Name of block and title of account
2	Location of property (by legal subdivisions or map surveys)
3a	Name and address of seller or person from whom property was acquired				b	Date acquired
4	Amount paid:	a	In cash
		b	In interest-bearing notes
		c	In non-interest-bearing notes
5a	Amount of other consideration
b	Explain the nature of other consideration and how you determined the amount shown on line 5a.
6	Legal expenses
7	Cruising, surveying, and other acquisition expenses
8	Total cost or other basis of property. Add lines 4a through 7
9	Allocation of total cost or other basis on books:	Unit	Number of units	Cost or other basis per unit	Total cost or other basis
a	Forested land	Acre
b	Other unimproved land	Acre
c	Improved land (describe) ▸	Acre
d	Merchantable timber. Estimate the quantity of merchantable timber present on the acquisition date (see Regulations section 1.611-3(e)). Details of the timber estimate, made for purposes of the acquisition, should be available if your return is examined.





e	Premerchantable timber. Make an allocation here only if it is a factor in the total cost or value of the land.



f	Improvements (list separately)





g	Mineral rights
h	Total cost or other basis (same amount as line 8). Add lines 9a through 9g
Part II Timber Depletion (see instructions)
1	Name of block and title of account ▸
	If you express timber quantity in thousand board feet (MBF), log scale, name the log rule used. If another unit of measure is used, provide details ▸
				(a) Quantity	(b) Cost or other basis
2	Estimated quantity of timber and cost or other basis returnable through depletion at end of the preceding tax year
3	Increase or decrease of quantity of timber required by way of correction
4a	Addition for growth (number of years covered ▸
b	Transfers from premerchantable timber account
c	Transfers from deferred reforestation account
5	Timber acquired during tax year
6	Addition to capital during tax year
7	Total at end of tax year, before depletion. Add lines 2 through 6
8	Unit rate returnable through depletion, or basis of sales or losses. Divide line 7, column (b), by line 7, column (a)
9	Quantity of timber cut during tax year
10	Depletion for the current tax year. Multiply line 8 by line 9
11	Quantity of standing timber sold or otherwise disposed of during tax year
12	Allowable as basis of sale. Multiply line 8 by line 11
13	Quantity of standing timber lost by fire or other cause during tax year
14	Allowable basis of loss plus any excess amount where decrease in FMV (before and after the casualty) exceeds the standard depletion amount, but not the block basis (see instructions)
15	Total reductions during tax year:
a	In column (a), add lines 9, 11, and 13
b	In column (b), add lines 10, 12, and 14
16	Net quantity and value at end of tax year. In column (a), subtract line 15a from line 7. In column (b), subtract line 15b from line 7
17	Quantity of cut timber that was sold as logs or other rough products
18	Section 631(a):
a	Are you electing, or have you made an election in a prior tax year that is in effect, to report gains or losses from the cutting of timber under section 631(a)? (see instructions)				Yes No
b	Are you revoking your section 631(a) election (see instructions)?				Yes No
Part III Profit or Loss From Land and Timber Sales (see instructions)
1	Name of block and title of account
2	Location of property (by legal subdivisions or map surveys)
3a	Purchaser’s name and address				b	Date of sale
4	Amount paid:	a	In cash
		b	In interest-bearing notes
		c	In non-interest-bearing notes
5a	Amount of other consideration
b	Explain the nature of other consideration and how you determined the amount shown on line 5a.
6	Total amount received for property. Add lines 4a, 4b, 4c, and 5a
7	Cost or other basis of property:	Unit	Number of units	Cost or other basis per unit	Total cost or other basis
a	Forested land	Acre
b	Nonforested land	Acre
c	Improved land (describe) ▸	Acre
d	Merchantable timber. Estimate in detail the quantity of merchantable timber on the date of sale or exchange. Include the quantity of timber in each species of timber by diameter at breast height (DBH) classes. State the log rule used if the unit of measure is thousand board feet (MBF), log scale. If another unit of measure is used, provide details. ▸











e	Premerchantable timber




f	Improvements (list separately)




g	Mineral rights
h	Total cost or other basis. Add lines 7a through 7g
i	Direct sale expenses (cruising, marking, selling)
8	Profit or loss. Subtract the sum of lines 7h and 7i from line 6
Part IV Reforestation and Timber Stand Activities (see instructions)
Account, block, tract, area, or stand ID for each Qualified Timber Property (QTP)			Kind of activity (burning, chopping, spraying, planting, seeding, thinning, pruning, fertilizing, etc.)	Number of acres treated	Total expenditures
1





2	Total
3	Total reforestation expenses
4a	Amount to be expensed under section 194(b). (See instructions for limitations)
b	Amount to be amortized under IRC 194(a), including remaining reforestation expenditures not expensed under section 194(b)
Part V Land Ownership
Show all changes in land accounts. Attach as many additional sheets as needed, following the format of lines 1 through 6.
1	Name of block and title of account ▸		Acres	Total cost or other basis. Give amount of March 1, 1913 appreciation, if included	Average rate per acre
2	Balance at beginning of year
3	Acquisitions during year
4	Sales during year
5	Other changes
6	Balance at end of year. Add lines 2 and 3, subtract line 4 and add or subtract line 5
Additional Information.

Part I — Acquisitions: Allocate the total acquisition basis across land, merchantable timber, premerchantable timber, improvements, and mineral rights. Document the timber estimate as of acquisition (species mix, DBH classes, log rule). This initial allocation drives all future depletion and gain/loss computations.

Part II — Timber depletion (unit method): Start with prior-year end quantities/basis, adjust for corrections, growth, transfers from premerchantable and deferred reforestation, and current-year acquisitions/capital additions. Compute the unit rate (basis ÷ quantity) and apply it to timber cut, timber sold as standing timber, and casualty losses. For casualties, you may claim the lesser of block basis or the decline in FMV exceeding standard depletion; support with appraisals and event documentation.

Section 631(a) election (cutting treated as sale): If you cut your own timber for sale/use in business, you may elect to treat the cutting as a deemed sale on the first day of your tax year. The gain equals FMV of the timber cut (stumpage) minus the depletion basis allocated to the cut volume; it is generally section 1231 gain reported with business property. Election remains in effect until revoked (prospectively). Track (i) deemed sale gain from cutting and (ii) ordinary income from subsequent product sales.

Section 631(b) sales (standing timber): Lump-sum or pay-as-cut sales of standing timber held for more than a year generally receive section 1231/capital gain treatment. Under pay-as-cut contracts, amounts paid for each unit cut retain capital characterization. Reduce the block basis by depletion allocated to the volume sold; net proceeds less basis and direct sales costs yield your gain/loss.

Part III — Profit or loss from land and timber sales: Show total consideration (cash, notes, other consideration), compute total amount realized, deduct basis components (land, timber, improvements) and direct sales expenses (cruising, marking, brokerage) to arrive at the transaction result. Attach schedules for species/DBH and unit measures used.

Part IV — Reforestation (Section 194): Track qualified reforestation expenditures by QTP (site prep, planting, seeding, fertilizing, release, etc.). You may (i) expense up to the statutory dollar limit for the year under Section 194(b), and (ii) amortize the remainder over 84 months (7 years) beginning with the first month of the second half of the tax year. Maintain per-stand detail to support future transfers to merchantable timber accounts.

Part V — Land ownership: Roll forward land accounts by block: beginning balance, acquisitions, sales, other changes, and ending balance with average rate per acre and any March 1, 1913 appreciation disclosures, if relevant.

Strategic coordination: Gains from cutting under 631(a) and standing timber sales under 631(b) generally flow through section 1231 netting on Form 4797. Net 1231 gain is usually treated as long-term capital gain; net 1231 loss is ordinary. Align Form T results with books, Form 4797, Schedule D (if applicable), and state timber tax filings to avoid mismatches.

Common risk areas: (i) Unsupported initial timber quantity/basis; (ii) failing to update growth/transfers; (iii) misclassifying pay-as-cut proceeds; (iv) omitting direct sales expenses; (v) exceeding Section 194 expensing limits or mis-timing amortization; (vi) casualty losses without credible valuation support; (vii) revoking 631(a) without observing prospective-only rules.

Last reviewed: 2025-10-28: If you believe this form requires an update, please contact us.

Tips for Efficient Filing

Adopt a consistent block structure (by tract/stand/species) and maintain a depletion ledger that reconciles to Form T each year. Capture cut/scale data promptly and reconcile to mill settlements. Keep a yearly memo documenting elections (631(a)) and reforestation expensing/amortization choices.

For reforestation, batch invoices by QTP and month. Decide each year how much to expense under Section 194(b) versus amortize under Section 194(a) to meet your tax planning goals (e.g., NOL smoothing, basis management). Update transfers from deferred reforestation to premerchantable and then to merchantable when biologically appropriate, and reflect these in Part II.

Best Practices & IRS Compliance Strategy

When selling timber, include clear contract terms identifying lump-sum vs pay-as-cut, measurement units, scaling procedures, and who bears logging/road costs; these details affect amount realized, basis allocation, and characterization under 631(b). Retain cruise reports and appraisals to substantiate quantities, quality, and stumpage values used in 631(a) computations.

For audits, cross-reference your Part II unit rate to cutting volumes, sales volumes, casualty volumes, and ending inventory. Keep a reconciliation from Form T to Form 4797 (and Schedule D where relevant). Annual consistency in methods, elections, and documentation is your strongest defense.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.