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Trump Advisors Try To Head Off Possible 'Scam' Of His Tax Plan

Trump Advisors Try To Head Off Possible 'Scam' Of His Tax Plan | Timberland Investment | Scoop.it
Trump has proposed to tax individuals’ income from partnerships, limited liability companies and other so-called “pass-through” business entities at a 15 percent rate -- down from a current top rate of 39.6 percent. That provision may get some new restrictions, said economist Stephen Moore, who has been advising Trump on tax matters.

“We are absolutely dedicated to making sure the 15 percent is for legitimate businesses,” Moore said in an interview Thursday.

The campaign has become concerned that people with high wage and salary income could attempt to reclassify their earnings as investment income and route it through a pass-through entity -- cutting their tax rate, Moore said. Trump’s advisers plan to release more details about his tax proposals in two weeks, Moore said.
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Overhaul of Maine tree growth tax credit chopped down by committee

Overhaul of Maine tree growth tax credit chopped down by committee | Timberland Investment | Scoop.it

Legislation designed to dramatically overhaul Maine's tree growth property tax credit program fell largely on deaf ears Monday as lawmakers on the Legislature's Taxation Committee unanimously rejected the proposal offered by Republican Gov. Paul LePage.

 

Among other provisions in the bill, LD 1632, is one that would have excluded from the program, which was designed to encourage timber harvest, any property that sits within 10 miles of the Atlantic Ocean. In all, about 3.8 million acres of forest are in the program.

 

Those speaking against the measure said it was largely meant as a provocative conversation starter for a tax credit program that some say is being abused by landowners who benefit from a large tax break but never actually harvest any timber.

 

Under the bill, new landowners who wanted to enter into the program would have to hold at least 25 acres of forest land. The current minimum is 10 acres.

 

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Under the tree growth program, a landowner agrees to a specific 10-year forest management plan in return for deep discounts on their property tax. The amount of the discount can vary depending on the current market value of timber and other factors.

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Timber Investments in Your Self-Directed Retirement Plan

Timber options are one of the many alternative investments allowed in a self-directed IRA.
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Forests, timberlands need fair tax policies

Forests, timberlands need fair tax policies | Timberland Investment | Scoop.it
Two-thirds of the state’s forests are owned by family timberland owners who plant, harvest and replant their lands to produce the raw materials for products we use every day, and increasingly, to produce a source of energy. They’ll tell you that theirs is a long-term business and it’s critical for them to operate their business in a climate of certainty. For decades that certainty has been rendered through existing federal tax provisions that allow landowners to deduct the annual costs associated with growing healthy, sustainable timberlands.

But this certainty is threatened by a tax reform package introduced in Congress last year —the Tax Reform Act of 2014 — that would repeal all four of the tax provisions that encourage investments in timberlands and their sustainable management. These proposals would raise taxes on private forestland and flatten our forest economy — perhaps to a devastating degree for many rural South Carolina communities.

According to research by F&W Forestry Services that analyzed the impacts on a small forest land owner in the South, removing these provisions would reduce returns and cash flows by almost one-third. Most timberland owners, especially smaller ones, need cash flow to justify their long-term investment in their properties. Without existing forestry provisions, many timberland owners would potentially be forced to convert their land to other uses.
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Judge: Timberland value plummets after conservation easement

Judge: Timberland value plummets after conservation easement | Timberland Investment | Scoop.it
More than 187,000 acres of forest in Minnesota fetches a lower price when you have to sell it all in one chunk.

That was the ruling this month of a Minnesota Tax Court judge who rejected the land appraisals from four Minnesota counties and delivered a victory to UPM Blandin, which owns the giant baby blue paper mill in Grand Rapids.

The judge ruled that Blandin’s forest — restricted by a conservation easement with the state — is worth about one-eighth the collective value quoted by the county’s assessors.

As a result, the tax base will decline in four counties; Itasca County, where most of the land is, will be hit hardest. The ruling also sets precedent for how swaths of forest in state conservation easements will be valued and taxed in the future.
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Scott Walker's budget restricts DNR review of timber cutting

Scott Walker's budget restricts DNR review of timber cutting | Timberland Investment | Scoop.it
Tens of thousands of acres of tax-subsidized private forest would be logged without state forester oversight of cutting plans under a proposal in Gov. Scott Walker’s budget.

The budget provision was requested by loggers who say state regulation is costly and unneeded because private foresters usually design cutting operations that adequately protect forests, streams and wildlife.

The change would affect the 3.2 million acres of privately held land — one-third of it open for public recreation — that owners have enrolled in the state managed forest program in exchange for lower property taxes.
The 1986 managed forest law requires owners to file 25-to-50-year plans specifying scheduled timber sales and management practices designed to ensure a sustainable supply of wood for industry as well as preservation of wildlife habitat, water quality and certain recreational opportunities.
Walker’s plan would provide owners with automatic state approval when they file timber-cutting notices if they hire a contractor who participates in the Department of Natural Resources cooperating forester program, which mandates minimum educational requirements and an agreement to use sound practices.
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Rayonier and county settle in timberland value dispute

Rayonier and county settle in timberland value dispute | Timberland Investment | Scoop.it

Rayonier and Wayne County have reached a settlement in their dispute over the valuation of the company’s timberland. No one is saying, though, what the settlement is.


In a joint press release released late Thursday afternoon, Rayonier and the county government announced “agreement on a settlement to their ongoing dispute regarding valuations of Rayonier-owned Wayne County timberland.” As the release noted, the dispute dated back to 2008 and involved various court proceedings.
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When Russell Schweiss, Rayonier’s director of corporate communications, was asked about the terms of the settlement, though, he responded, “Rayonier and Wayne County have resolved the long-running tax dispute on mutually agreeable terms. Rayonier is pleased with the resolution. I am not, however, at liberty to discuss the specifics of the settlement.”
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Rayonier had contended that its timberland values from the 2008 countywide revaluation were too high. In the resulting dispute, a superior court judge found that the county’s process for valuing large-acre tracts was fundamentally flawed, and the Assessors’ Office eventually had nearly 50 Rayonier tracts reassessed.

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Chairman Camp’s Proposals Place REITs in the Crosshairs

Chairman Camp’s Proposals Place REITs in the Crosshairs | Timberland Investment | Scoop.it

On February 25, House Ways and Means Committee Chairman David Camp (R.-Mich.) proposed a dramatic overhaul of the U.S. tax code (the Code). While the “Tax Reform Act of 2014,” (the Proposals) contains a number of previously released tax law changes, it also includes an unexpected and unwelcome strike on many public REITs. The general consensus is that the Proposals are unlikely to reach a vote in the House in 2014.

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The Code requires that at least 75 percent of a REIT’s assets consist of real estate assets, cash and cash items, and at least 75 percent of a REIT’s income be derived from real estate-related sources. Under the Proposals, “real property” would be defined to exclude timber as well as all tangible property with a class life of less than 27.5 years (as defined under the depreciation rules) for purposes of the REIT income and asset tests. This provision would exclude not only timber, but also cell towers, billboards and several other real estate asset classes in which many public REITs are invested today, in many cases comprising their entire portfolios.


The provision removing timber from the definition of “real property” is particularly surprising, because the IRS first confirmed that timber companies can be REIT-qualifying in the early 1970s, and subsequent use of the REIT structure led to a revitalization of the timber industry. The provision applies beginning in 2017 and creates uncertainty for these companies.

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Grand Lake Stream: Preserving a Forest Community Using New Market Tax Credits

The town of Grand Lake Stream and the Downeast Lakes Land Trust used the New Markets Tax Credit program to preserve its woodlands and sustain the local economy.
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Audit: Minnesota sustainable forestry program lacks oversight, should be changed or scrapped

Audit: Minnesota sustainable forestry program lacks oversight, should be changed or scrapped | Timberland Investment | Scoop.it

There is so little oversight of a state program that has spent $44 million promoting sustainable forestry on private land that lawmakers should make significant changes to it or scrap it altogether, Minnesota's legislative auditor said Tuesday.


The Sustainable Forest Incentive Program was created in 2001 to encourage good forestry on private land by locking in agreements for at least eight years that require landowners to submit and abide by sustainable forest management plans. In return, they get incentive payments set at a flat $7 per acre. About 2,300 landowners participated this year, with over 737,000 enrolled acres. The idea behind the payments was to offset property taxes on private forest land, thus encouraging landowners not to develop it.


But Legislative Auditor James Nobles' report said lawmakers should consider ending the program and identifying better ways of encouraging sustainable forestry. The findings follow Gov. Mark Dayton's recent calls for next year's legislative session to focus on eliminating old, unneeded laws and programs.


Nobles told an oversight subcommittee his office "is not criticizing the concept of sustainable forest management. We are simply questioning whether this particular tool ... has been designed and implemented in a way that ensures that we are achieving measurable results."

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Pennsylvania sales tax exemptions may expand to logging industry

Pennsylvania sales tax exemptions may expand to logging industry | Timberland Investment | Scoop.it

Mark Ridall has worked in the logging business for more than 30 years and has seen a rural, rugged industry transformed.

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Ridall said logging has become more mechanized, efficient and sustainable. But that also means more expensive.


A brand new skidder, Ridall said, used for hauling freshly cut logs across the ground, can easily run at $100,000. At 6 percent, sales tax would tack on another $6,000.


But if a sawmill purchased similar equipment to move logs on and off a truck bed, it wouldn’t have to pay that extra $6,000. While Pennsylvania’s sales and use tax exemptions cover the agriculture and manufacturing sectors, they don’t account for timber harvesting.

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From dairy farming to photography, Pennsylvania has sales and use tax exemptions for several handpicked industries. Two of the broadest cover agriculture and manufacturing. But these definitions leave out the timber industry, a symptom of cherry-picked exemptions in the state’s tax code.

Fortunately for the timber industry, Pennsylvania lawmakers seem willing to expand sales tax exemptions.


Members of the House Finance Committee Tuesday unanimously passed a bill from Rep. Matt Gabler, R-Elk, that would wrap the logging industry into the agriculture exemption section of the tax code.

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Similar exemptions exist in Texas and Tennessee, though Pennsylvania is the nationwide leader in hardwood lumber production, according to a 2010 report from the Department of Agriculture and its Pennsylvania Hardwoods Development Council

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Report: Private Forests and the Tax Code

Sam Radcliffe's insight:

This comprehensive report was submitted to the House Ways and Means Committee recently by the National Alliance of Forest Owners.

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U.S. Aims to Clamp Down on Tactic to Avoid Estate Tax

U.S. Aims to Clamp Down on Tactic to Avoid Estate Tax | Timberland Investment | Scoop.it

The U.S. government on Tuesday proposed making it harder for wealthy business owners to transfer assets to heirs without paying estate and gift taxes. The plan from the Treasury Department and Internal Revenue Service would place new limits on a common technique used to transfer interests in family businesses.

 

The regulations address the practice of discounting the value of ownership stakes in closely held businesses or land. The discounts are permitted because some stakes are worth less since they are harder to sell or represent a minority interest. The reduced values allow wealthy families to pack assets inside the $10.9 million lifetime exclusion from estate and gift taxes for married couples.

 

A typical strategy would place, say, $14 million worth of assets—stock, a business, real estate or even cash—into a company with restrictions on some of the owners’ ability to sell their pieces, said David Scott Sloan, a partner at Holland & Knight LLP in Boston who advises high-net-worth families. Those restrictions could allow the owners to get an appraisal saying that the actual value of those assets was about $10 million.
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The government’s proposal would make it harder for taxpayers to claim valuation discounts that taxpayers typically have used to reflect the diminished value of minority interests, said Richard Dees, a partner at McDermott Will and Emery in Chicago. “This is going to be a major problem for all family-owned businesses,” Mr. Dees said. “This all boils down to the question of whether a family business should be valued as if it’s owned by one person.”

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Webinar: Timber Tax Filing for the 2015 Tax Year

Webinar: Timber Tax Filing for the 2015 Tax Year | Timberland Investment | Scoop.it
Timber tax laws have changed due to the new tax law that was passed by Congress in December 2015. Brand new tax provisions on capital gains for timber corporations will affect timber businesses and owners. Business deductions on equipment costs have been increased significantly. Special charitable donation deduction on qualified conservation easement was extended.

To help the 2015 tax return filing, this one-hour webinar will cover the rules for timber tax reporting, including the latest law changes.
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IRS moves to raise tax rate on private equity management fees

IRS moves to raise tax rate on private equity management fees | Timberland Investment | Scoop.it

Private equity firms will no longer be able to convert income from management fees into capital gains, which are taxed at a lower rate, under a proposed rule by the IRS published in the Federal Register Thursday.

The change, which clarifies existing regulations, could be enforced now, but the IRS is accepting public comment until Oct. 21.

The IRS put disguised payment practices at partnerships on their regulatory agenda in 2013. “They are going to take a pretty tough line,” said Steven Rosenthal, a tax lawyer and visiting fellow at the Tax Policy Center in Washington, in an interview. “I think it’s important to give this industry clear guidance.”

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Tax Reform and the Timber Industry

Tax Reform and the Timber Industry | Timberland Investment | Scoop.it

Here is a list identifying many of the issues under discussion that could affect timber companies, followed by a somewhat more detailed discussion of some of them.


  1. Raise capital gains and dividend tax rates;
  2. Recharacterize timber income as ordinary income, instead of capital gains;
  3. Disqualify timber as real property for REIT qualification purposes;
  4. Eliminate expensing of reforestation expenditures and limit seven-year depreciation to ornamentals;
  5. Eliminate the uniform capitalization (UNICAP) inventory exception for timber; i.e., timber subject to UNICAP inventory rules;
  6. Potentially longer depletion and depreciation periods for cost recovery;
  7. Consistent basis for estate tax and beneficiary; and
  8. Tax built-in capital gains on gifts and bequests of interests in timber property.
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Timberrrr!! Ninth Circuit Chops Down the Tax Court in Estate of Giustina

Timberrrr!! Ninth Circuit Chops Down the Tax Court in Estate of Giustina | Timberland Investment | Scoop.it
In the recent unpublished opinion of Estate of Giustina v. Commissioner,1  the Ninth Circuit reversed a Tax Court opinion dealing with the valuation of a 41.128% limited partnership interest.  The partnership was in the timber business.  As with just about all valuation cases involving a going concern business, the Tax Court looked to different methods of valuation, as well as the different discounts that may be applicable.

In general, the Ninth Circuit held that the Tax Court did not commit reversible error with respect to the various discounts.2  The main issue that the Ninth Circuit reversed and remanded dealt with the Tax Court’s assigning a weighted average to two different valuation methodologies in coming up with its final valuation.3

The Cashflow Method is basically the value of the partnership as a going-concern and assumes that the heirs would continue to operate the partnership as a timber business.  The Asset Method assumes that the heirs would sell all the timberland assets of partnership and distribute the proceeds to the partners.

The Tax Court determined that the value of the partnership using the Cashflow Method was $51.7 million and the value using the Asset Method was $150.7 million.  Rather than pick one of the methodologies as an appropriate value, the Tax Court looked at the “odds” that the heirs would continue to own the partnership as a going concern versus the “odds” that the heirs would agree to sell the timberland assets and distribute the proceeds.

The Tax Court then detailed the difficulty the heirs who wished to liquidate the partnership would have to achieve that result.4  As explained by the Ninth Circuit:

In order for liquidation to occur, we must assume that (1) a hypothetical buyer would somehow obtain admission as a limited partner from the general partners, who have repeatedly emphasized the importance that they place upon continued operation of the partnership; (2) the buyer would then turn around and seek dissolution of the partnership or removal of the general partners who just approved his admission to the partnership; and (3) the buyer would manage to convince at least two (or possibly more) other limited partners to go along, despite the fact that "no limited partner ever asked or ever discussed the sale of an interest." Alternatively, we must assume that the existing limited partners, or their heirs or assigns, owning two-thirds of the partnership, would seek dissolution.

As a result of the difficulty the heirs would have to dissolve the partnership, the Tax Court concluded that there was a 25% likelihood of liquidation of the partnership.  It therefore assigned a 25% weight to the Asset Method valuation and a 75% weight to the valuation of the partnership as a going concern (i.e., the Cashflow Method).  This resulted in an overall value $76,447,143 ((75% x $51,702,857) + (25% x $150,680,000)).

In a very brief opinion, the Ninth Circuit rejected this methodology.  It seems as though the Ninth Circuit did not necessarily have problem with the Tax Court using a weighted average approach, although it is not clear.  As the quote above states, the Ninth Circuit noted the overall difficulty the heirs would have in forming a 2/3rds voting bloc that would be necessary to vote to dissolve. Quoting Estate of Simplot v. Commissioner,5 the Ninth Circuit stated “the Tax Court engaged in ‘imaginary scenarios as to who a purchaser might be, how long the purchaser would be willing to wait without any return on his investment, and what combinations the purchaser might be able to effect.”
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Tax court shoots down IRS’s highest and best use argument in conservation easement case and refuses to impose penalties

Tax court shoots down IRS’s highest and best use argument in conservation easement case and refuses to impose penalties | Timberland Investment | Scoop.it

On May 6, 2014, the Tax Court (Goeke J.) issued yet another significant decision in the area of conservation easements. Palmer Ranch Holdings Ltd. v. Commissioner, T.C. Memo 2014-79. The property at issue was 82 acres of land in Sarasota, Florida. The IRS conceded that the donation of the easement encumbering that land met all of the requirements of section 170, but contested the taxpayer’s claim that the value of the easement was $23,942,500. The dispute between the IRS and the taxpayer centered around the “highest and best use” of the property before the easement. The taxpayer argued that the property could be rezoned to permit denser development, thus making the property more valuable. The IRS argued that the proposed rezoning plan was not “reasonably probable,” thus the property could only be developed under the less-dense zoning designation.


Under the Treasury Regulations applicable to conservation easements, a taxpayer may value an easement by determining the value of the encumbered property at its highest and best use prior to the easement, and then subtracting the value of the property’s highest and best use after the easement. This method is known as the “Before and After” method of valuing an easement. The “highest and best” use of property must be a use that is reasonably probable in the reasonably near future, though it need not be the current use or an intended use of the property. Hilborn v. Commissioner, 85 T.C. 677 (1985).


In the past year, the IRS has repeatedly argued that the taxpayer’s claimed highest and best use was not reasonably probable, thus the value of the easement is greatly overstated.
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The IRS first argued that the taxpayer had attempted (and failed) to rezone property in the past, thus rezoning was not reasonably probable. The Tax Court disagreed, distinguishing other cases that relied on zoning history, and noting that the previous denial was a 3-2 vote, which could have changed over time.
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The IRS also argued that the proposed highest and best use was not reasonably probable because the property lacked sufficient road access and the adjoining neighborhood would oppose the development, which would require access to their roads. The Tax Court dismissed the IRS’s position as to road access and neighborhood opposition, observing that concerns about neighborhood opposition required too many assumptions that the Tax Court was not willing to adopt.
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Finally, the Tax Court disagreed with the IRS’s claim that the wildlife corridor found on the property would preclude rezoning, siding with the taxpayer in its interpretation of the zoning regulation and finding that a 660 foot radius surrounding the protected areas would be sufficient.
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This case again illustrates the immensely significant role that the arbiter plays in making a judgment as to “highest and best use.” While the Tax Court has made that judgment call in the IRS’s favor on several occasions, here, the Tax Court made that judgment call in the taxpayer’s favor. This opinion will assist taxpayers arguing a highest and best use that requires a zoning change. However, at the end of the day, the judgment call as to highest and best use is, well, up to the judge.

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Proposed Tax Reform Includes Ending 1031 Exchange

Proposed Tax Reform Includes Ending 1031 Exchange | Timberland Investment | Scoop.it

The ninety two year old 1031 exchange statute is once again the target for abolishment in current tax reform proposals. Congressman Dave Camp, Chair of the U.S. House of Representatives Committee on Ways and Means, has a bipartisan tax reform group tasked with identifying eleven subjects including real estate tax matters as potential revenue raisers. Senator Max Baucus, Chair of the Senate Finance Committee has targeted the elimination of the 1031 exchange as one of many means of tax reform.


Section 1031 “like-kind” exchanges is estimated to cost over $42 billion over the five year period 2012-2016 by the Joint Committee on Taxation (JCT). Estimates by the JCT in prior years estimated the tax deferral to be $16.2 billion over the five year period 2010 – 2014. The two fold difference is attributed to a change in accounting methodology.


The Treasury Department 1031 Regulation is enforced by the Internal Revenue Service in Section 1.1031 stating that “no gain or loss shall be recognized on the exchange of property held for productive use in trade or business, or investment, if such property is exchanged solely for property of like kind which is to be held for productive use in trade or business or for investment.” Individuals, marrieds, partnerships, trusts, corporations use 1031 exchanges when selling and replacing real and personal property to defer federal and state capital gain and recaptured depreciation taxes. The taxes are deferred until the replacement property is sold and not replaced, effectively cashing out. The economic position of the taxpayer does not change in a 1031 exchange; they have the same amount of cash and debt if not more. If the taxpayer receives cash or reduction in debt, then a tax is due.

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Tax Treatment of 2013 Timber REIT Dividends

Tax Treatment of 2013 Timber REIT Dividends | Timberland Investment | Scoop.it

The IRS Tax code requires real estate investment trusts (REITs) in the United States to pay out at least 90% of their taxable income to shareholders as dividends. In exchange, the IRS does not levy corporate taxes on this REIT income; taxes are paid – once – by shareholders on the dividends. This single-taxation of REIT income represents a key benefit and attraction to investors.


Timberland-owning REITs enjoy an added benefit. Most timber REIT distributions (related to income from the sale of timber) are treated as long-term capital gains and taxed at relatively lower 15% tax rates compared with ordinary dividends (for those in the top 39.6% ordinary income tax bracket, the 2013 capital gains rate is 20%).

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For Plum Creek, Potlatch and Rayonier, 100% of dividends paid in 2013 will be treated as capital gains. For Rayonier shareholders, $1.14 (61.29%) will be treated as ordinary dividends while $0.72 (38.71%) qualify as capital gains. 

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LeeMitchell's curator insight, June 9, 8:52 AM
The IRS Tax code requires real estate investment trusts (REITs) in the United States to pay out at least 90% of their taxable income to shareholders as dividends. In exchange, the IRS does not levy corporate taxes on this REIT income; taxes are paid – once – by shareholders on the dividends. This single-taxation of REIT income represents a key benefit and attraction to investors.
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Plum Creek Executive Says Audit Activity Increasing for Timber REITs

Plum Creek Executive Says Audit Activity Increasing for Timber REITs | Timberland Investment | Scoop.it

Paul Stamnes, vice president of tax with Plum Creek Timber Company (NYSE: PCL), joined REIT.com for a video interview at REITWise 2013: NAREIT’s Law, Accounting and Finance Conference in La Quinta, Calif.

Plum Creek is one of the largest land owners in the nation. Stamnes described audit issues surrounding timber REITs. 

“In the last couple of years there has been increased activity, in particular looking at transfer pricing,” he said. “The IRS is really starting to focus on REITs, primarily from the taxable entities, because that’s where the tax dollars are.”

Stamnes explained concerns regarding recreational leasing.

“Recreational leasing is somewhat unique to the timber REIT industry, because timber REITs own a lot of land,” he said. “Clubs engaged in hunting or other activities will lease land from timber companies because our land is generally open to the public when we’re not engaging in forestry activities. The critical tax issue is ensuring that income remains qualified for REIT purposes.”

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Tax Plan May Provide Real-Estate Boost

Tax Plan May Provide Real-Estate Boost | Timberland Investment | Scoop.it

Despite the austerity mood in Washington, President Obama's proposed budget would provide tax relief to some foreign investors, a move the U.S. real-estate industry has been seeking for years.


As part of a larger push to spur private investment in U.S. infrastructure, Mr. Obama has proposed changes to a 1980s tax policy called the Foreign Investment in Real Property Tax Act, or Firpta, that would exempt foreign pension funds from paying taxes on gains from real-estate sales.


The proposal is still subject to congressional approval, which will likely prove tricky in the current budget-cutting climate. It also doesn't go as far as the real-estate industry would like because the proposed exemption would only apply to overseas pension funds, not all foreign investors.

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Firpta had led a number of investors to change their strategies to investing in real-estate debt in the U.S. rather than equity, said Ben Sanderson of Hermes Real Estate Investment Management Ltd., which manages money for pension funds. ***

Firpta taxes gains from foreign sales of assets including buildings, land, mines and timber, as well as stock in real-estate companies. While foreign investors consider it onerous, many still invest in the U.S. because of its clear legal system and a transparent property market, where price and performance data is easy to obtain.

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Patrick Kanters, managing director of global real estate at APG Asset Management, the fund manager that invests €329 billion ($428.9 billion) for pension funds including Dutch civil-service pension fund ABP, said the group had been investing in U.S. real estate since the late 1990s, but that the proposed change was a "great idea" that would set a more-level playing field for investors.


He said that today, domestic buyers in the U.S. are able to place higher bids in competitive tenders for properties because their future internal rates of return, or IRR, aren't affected by the added tax on future capital gains. "They can pay slightly more to get the same IRR," Mr. Kanters said.

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