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John L. Greene, U.S. Forest Service, Southern Research Stn, jgreene01@fs.fed.us (Presenter)
Paul Catanzaro, University of Massachusetts-Amherst, cat@umext.umass.edu
Brett Butler, USDA Forest Service, Northern Research Stn., bbutler01@fs.fed.us
Jake Hewes, University of Massachusetts-Amherst, jhewes@eco.umass.edu
Michael A. Kilgore, Univ. of Minnesota, Dept. of Forest Resources, mkilgore@umn.edu
David B. Kittredge, University of Massachusetts-Amherst, david.kittredge@eco.umass.edu
Zhao Ma, Utah State University, Quinney College of Natural Resources, Department of Environment and Society, zhao.ma@usu.edu
Mary Tyrrell, Yale School of Forestry & Envir. Studies, mary.tyrrell@yale.edu

 

Ten focus groups were held with family forest owners in the North, South, and West to investigate their familiarity and experience with federal, state, and local taxes. This paper presents the results for the federal income and estate taxes. Three estate tax provisions, gifting, the annual exclusion for gifts, and the effective exemption amount for estates, were brought up in half or more of the sessions. Trusts and other sophisticated estate planning tools also were frequently mentioned. In contrast, only one income tax provision, long-term capital gain treatment of timber income, was brought up in half or more of the sessions. In addition, both knowledgeable and uninformed owners seemed to believe that simplistic strategies can address complex tax issues: that timber income (or amounts below a certain threshold) is tax-free, that simply adding a child’s name to a deed or account circumvents taxation, or that joint tenancy is an effective estate planning tool. Several themes emerged in the discussion in every region: the problem of children not being interested in the family forest, the disastrous results of inadequate planning or unwillingness to pay for expert advice, and the effects of tax uncertainty.