Casualty losses of shade trees

by Stephen Dicke, Mississippi Director

Recovery efforts following storms, fires, and other casualties sometimes require owners to pay for tree repair, removal, or restoration. Tree damage may also reduce property value.

To help, the federal income tax code allows for recovery of expenses and losses that are not covered by insurance. The deduction of a shade tree casualty loss follows special tax rules which are best followed by a tax advisor. Tax advisors need arborists to document damage and estimate costs of cleanup, tree repairs, removals, and restoration.

Be forewarned if you are ever asked to appraise tree values for tax purposes. On personal use property trees, buildings, and land are bundled together as one unit. That means only a real estate appraisal is useful. The opposite is true on income producing property, like businesses and rentals. Trees are separated from land and buildings for tax purposes. Here, an arborist’s appraisal can be very useful.

For more information visit the National Timber Tax website or review the recent Mississippi State publication (right).