Bark beetles rocked by sound

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Tax Break for Wildfire Mitigation Expenses

Some questions have arisen regarding the Colorado income tax reduction for wildfire mitigation expenses noted in our last alert. see Taxpayer Service Division

Please note that in kind expenses do not qualify as they do under many grants. Costs means any actual out-of-pocket expense incurred and paid by the landowner and documented by receipt.

Expenses for spraying trees to prevent beetle infestation may not qualify either. Ric Eversole, Tree Farmer and CPA, was kind enough to look up the law and sent us the following:

Click here: Legal Resources

 

Hi Wes!  Glad to help; it's lunchtime so I've got a few minutes to research your query, which, by the way is a good one.

 

I looked at the law itself, and include here a web site that you can access; going to CRS Sec 39-22-104(4)(n):

 

Item III(E) defines Wildfire mitigation measures as "the creation of a defensible space around structures; the establishment of fuel breaks; the thinning of woody vegetation for the primary purpose of reducing risk to structures from wildland fires; or the secondary treatment of woody fuels by lopping and scattering, piling, chipping, removing from the site, or prescribed burning; so long as such activities meet or exceed any Colorado state forest service standards or any other applicable state rules."

 

Reading the law itself does not seem to include spraying to prevent MPB infestation, but that is just my interpretation. 

 

Keep in mind too, as we discussed last week, that anyone who is deducting expenses as a business may  already get the benefit of these deductions, unless the costs are incurred for a personal residence.

 

Also bear in mind that the tax benefit is not huge; at most it will be less than 5% of $2,500, or about $125.

 

Hope this helps. Ric

If you need more clarification or have other tax related questions regarding forest management, you may wish to consult Ric Eversole, M.A., CPA directly.RLEVERSOLE@aol.com
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Colorado State Forest Service Insect and Disease Quarterly Report

February 2010 Volume 2, Issue 1
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