Why Do You Need A Consultant?
The reasons why you need a consultant are almost endless. The main one is that we usually save or make you more money! Another is that we help you make your land improvements in a lawful way. The next is that we have years of training and experience dealing with the issues you may have never dealt with before.
As the years pass, the laws concerning land management change and become more restrictive. Oftentimes, the average landowner has no idea that he or she has even broken a law when implementing a management regime. There are laws protecting wetlands, wildlife and property that are easily broken if you are not aware of them.
Would you take apart your car if you didn't know how to put it back together? If you were smart, you wouldn't. Ecosystems are sometimes very sensitive. One misplaced piece and it could completely collapse. We have extensive training in applying ecological concepts that allows us to make decisions that will help you reach your objectives in a quick, efficient and safe manner.
On average, when a landowner utilizes a forestry consultant, he or she will receive approximately 30% more on a timber sale than without a consultant. Compare that with the modest 7-15% we charge for the administration of the sale, and you will realize that hiring a consultant is a great investment! We also know when to apply herbicides, fertilize, prune...all critical elements of forestry that will maximize your returns. We can help with obtaining cost-share assistance for various projects and write management plans; a necessity when applying for cost-sharing. If you wish to lease your land to hunters or cattlemen, we can provide assistance with that as well!
The next and probably the most important part is TAX. Income from timber sales is taxed differently than 'Ordinary Income'. Timber value is treated as 'Capital'. The income from timber is treated as 'Capital Gains'. In order to reduce the taxable amount from a Timber Sale, the 'Basis' (cost) of the timber at the time of property acquisition must be known. This amount may only be figured up by a qualified professional such as an educated and experienced Forester. Without this evaluation and estimate, there is no 'Basis' and, thus, the entire amount of the sale may be subject to taxation (Disclaimer: We are not tax advisors, and your CPA should be involved in any tax decisions you may make).
Here is a very basic example:
Let's say you have purchased a property for $300,000 and the beginning timber basis has been calculated to be $75,000. After a period of time, there is a sale of timber from the land for the amount of $100,000. Since the timber basis at the time of purchase was found to be $75,000, that may be subtracted from the total amount of the sale to come up with the taxable amount. The total taxable amount in this situation would be $25,000. At a tax rate of 28%, the total tax owed would be $7,000. If the timber basis had not been calculated by a qualified individual, then the total taxable amount would likely be $100,000. At that same rate of 28%, the total tax liability would be $28,000. That is a difference of $21,000! Of course, there is a lot more to this than just assigning dollar values to your timber, but usually only foresters have the background and education to do this correctly.
Thank you for visiting USFWC!