Public Lands

1872 Mining Law Reform

The 1872 Mining Law charges mining companies no royalties for the minerals they remove from federal lands and allows them to purchase federal land for between $2.50 and $5.00 per acre. There have been temporary bans on new sales in each appropriations bill since 1995, but no permanent ban. Taxpayers receive no rent or royalties […]

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Amortization and Expensing of Reforestation Expenditures

The amortization and expensing of reforestation expenditures provision of the tax code allows for the deduction of up to $10,000 per year ($5,000 for married individuals filing separately from their spouses; no limit for trusts) of qualifying reforestation costs paid or incurred after Oct. 22, 2004, for each qualified timber property. The remaining costs in […]

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Fair Value Grazing Fees

The formula for determining the grazing fee for lands managed by the Bureau of Land Management and the Forest Service uses a base value set in 1966 that the lease rates for grazing on private lands, beef cattle prices and the cost of livestock production adjusts annually. By law, the grazing fee per animal unit […]

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Forest Service Salvage Fund

This program allows the Forest Service to sell timber from public forests that fire, insects or disease have damaged at below market value rates without congressional oversight. The proceeds are diverted to a dedicated fund which is supposed to be used to administer the program and provide engineering support for future timber salvaging operations.  

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Capital Gains Treatment for Income from Qualified Timber

Individual owners, as opposed to companies, are allowed to treat income from dispositions of timber held for more than one year before disposal as a capital gain, rather than ordinary income, thus allowing them to be taxed at a lower rate. Income from cutting timber which has been owned, or the right to cut which […]

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Expensing of Timber Growing Costs

This tax expenditure allows individuals and companies to deduct the costs of growing commercial timber stands immediately. This is an exception to general tax rules, which normally require companies to capitalize these costs (i.e. depletion or depreciation) over a number of years. Growing or production costs include indirect carrying costs, such as interest and property […]

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Special Rules for Mining Reclamation Reserves

This provision allows taxpayers to deduct the estimated reclamation and closing costs for mining and solid waste disposal sites as if closing and reclamation were currently occurring, even before such work has begun or the costs incurred. Standard treatment would be that these costs cannot be deducted until economic performance actually occurs and so results […]

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Capital Gains Treatment for Royalties from Coal

Individual owners, as opposed to companies, are allowed to treat income from dispositions of coal held for more than one year before disposal as a capital gain, rather than ordinary income, thus allowing them to be taxed at a lower rate. The current maximum applicable capital gains rate is 20 percent, compared to the top […]

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