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Posted Monday, June 15, 2009
Pittsboro, NC - If you are thinking about logging your land and selling your timber, go quickly to the North Carolina Extension Office behind the court house. Or go to the North Carolina Extension website.
Did not talk to the loggers directly unless you really know what you are doing:
- Do you know the market value of timber at the moment?
- Do you know how many board feet of timber you have to sell?
- Which measurement rule, such as Doyle, was used to measure the board feet?
- What kind of trees do you have on your land?
- What is the established basis value for you timber?
- What tax implications will you have if you sell the timber?
- What are the tax implications if you DONT log the land and pass it to your estate?
- Is it better tax wise for you to timber the land or your heirs?
Timber should be sold via an auction. There will be a timber deed signed at a closing. You should have a contract with the logging company on what they will do, won't do and how long they they have to do it. They should use BMP (Best Management Practices) which should be in the contract. One line in the contract mentioning BMP means the logger has to follow a book of established practices.
How do you answer the previous questions? You read, talk to a CPA if needed and most importantly you hire a forester. The forester will "cruise" your timber, tell you how many board feet of which species you have in inventory. The forester should know roughly the value of the timber. The forester will set up an auction date, send out his cruise inventory to logging companies, conduct the auction, and then manage the logging operation. For the work the forester gets 5-10% of the timber price.
The state of North Carolina has quite a bit of information for land owners selling timber. You should read it. There are tax implications to selling timber. The state also has a phone number and I think they now have a web site that lists timber prices in different regions of NC . Many people sell timber and they don't get the full value for their timber. You only get to log timber once or twice in a life time so you can't afford to learn from your mistakes.
I bought land years ago and had to timber part of the property to purchase the land. I learned quite a bit about the timber business quickly. I had no choice. I have heard and read many horror stories of people selling timber. The land owner is told that the logger will pay say $10,000 for the trees. The owner says that is a lot of money I did not know I had so they sell. The owner does not realize that the timber was worth two or three times as much.
The last time I checked the value of timber, it was half of what it was when I sold. The market is cyclical. If you can wait you might want to try to time the market when it is higher. But first you have to know what you have to sell and what it is worth.
Start reading on the web and/or get to the NC Extension Office. The Extension Office has classes for timber land owners covering taxes and timber sales. The Chatham office is excellent. Get there ASAP. Don't talk to a logging company, don't pass go, get to the Extension office.
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