1. REFORESTATION COSTS

2. REFORESTATION COSTS OLD LAW
Prior to October 23, 2004, under IRC Section 194, up to $10,000 per year of qualifying reforestation costs could be amortized over 84 months.
In addition, prior to October 23, 2004, IRC Section 48 permitted a 10 percent tax credit on up to $10,000 per year of qualifying reforestation costs.
All taxpayers except trusts were eligible for both provisions.
Costs exceeding $10,000 per year remained in the depletion account until the trees were sold or otherwise disposed of.

3. REFORESTATION COSTS NEW LAW
Effective October 23, 2004 all taxpayers except trusts can deduct outright (expense) up to $10,000 per year of qualifying reforestation costs with respect to each eligible timber property. The term "eligible timber property" is addressed in the instructions on the current edition of IRS Form T.
Eligible reforestation costs exceeding $10,000 per year per eligible timber property, without limit, can be amortized over 84 months. Trusts are eligible for this provision, including amortization of the first $10,000.