The FLTC Tax Report

News from the Forest Landowners Tax Council


The following, from the Forest Landowners Tax Council, updates us on current federal tax events and legislation affecting non-industrial private forest landowners.

IRC Section 631(b):  As reported earlier, the U.S. House of Representatives passed the Tax Relief Guarantee Act of 2002 (H.R. 586), which included the stipulations of the Timber Tax Simplification Act of 2001 (H.R. 1341), which modifies Internal Revenue Code Section 631(b) to allow capital gains treatment on income from lump-sum timber sales for most non-industrial, private forest landowners.

But, our struggle continues on the Senate side.  However, there’s great hope as we understand that a “small business / ag tax bill” is being crafted by Finance Committee Ranking Member Charles Grassley (R-IA), and may include our S.567 language to correct IRC 631(b), thanks to Sen. Jeff Sessions (R-AL) office. At this writing – September 13 – a Finance Committee mark-up is tentatively planned for next week.

Other good news comes in the form of a letter of support from the Land Trust Alliance to Senators Max Baucus (D-MT) and Charles Grassley (Chairman and Ranking Member of the Finance Committee, respectively):

“The Land Trust Alliance represents more than 1,200 local and regional organizations that work with private landowners on voluntary conservation of America’s landscapes.  We are writing to endorse S.567 and HR 1341, which simply the tax treatment of timber sales by non-industrial forest landowners, as environmentally important proposals which will materially aid in the maintenance of America’s privately owned forest lands. 

Non-industrial landowners hold most of America’s privately owned forest land.  But that forest land is disappearing.  The National Resources Inventory of the US Department of Agriculture shows that in the 1990’s, nearly twice as much forest was being lost top development as any other land type. 

Simplifying IRC 631(b) so that a forest landowner doesn’t have to carefully structure how they sell their timber to have their timber sale proceeds taxed as capital gains is one small way we can encourage landowners to view timber production as a viable and sustainable economic output that can support their continued ownership of forest land.  All too often, the most common alternative is conversion of that forest to other land uses.

Common-sense, negligible-cost legislation like S.567 and HR 1341 often gets lost in the shuffle – it’s not controversial enough to stand out.  We hope you will do all you can to see that this proposal is enacted into law this year.  Sincerely yours, Russell Shay, Director of Public Policy”

To learn more about S. 567, call FLTC at 703-549-0747 or go to “” and click the ‘Hot Issue’ button.


The Forest Landowners Tax Council is an independent non-profit organization dedicated to providing an effective and unified voice for non-industrial, private forest landowners on federal tax issues.  Membership is open nationwide. Visit their website, or contact them at e-mail:, tel:  703-549-0747, fax:  703-549-1579.



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