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IRS.gov Website
Publication 535
taxmap/pubs/p535-034.htm#en_us_publink1000208921

Reforestation Costs(p24)

For Use in Tax Year 2013
rule
Reforestation costs are generally capital expenditures. However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. The remaining costs can be amortized over an 84-month period. For information about amortizing reforestation costs, see chapter 8.
Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Qualified timber property is property that contains trees in significant commercial quantities. See chapter 8 for more information on qualifying reforestation costs and qualified timber property.
If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed.
taxmap/pubs/p535-034.htm#en_us_publink1000208922

How to make the election.(p24)

For Use in Tax Year 2013
rule
You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made.
If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Clearly indicate the election on your amended return and write "Filed pursuant to section 301.9100-2." File the amended return at the same address you filed the original return. The election applies when computing taxable income for the current tax year and all subsequent years.
For additional information on reforestation costs, see chapter 8.
taxmap/pubs/p535-034.htm#en_us_publink1000208923

Recapture.(p25)

For Use in Tax Year 2013
rule
This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. For more information on recapturing the deduction, see Depreciation Recapture in Publication 544.