by Tamara Cushing, Starker Chair of Private and Family Forestry, Oregon State University
That’s right, it is tax time again. I know, you didn’t need me to remind of you of that. For those of you who had a timber sale in 2014, you will need to report that income on your 2014 tax return. If you had the timber for more than one year, that income will qualify as capital gains income. Now why would that matter? First off, you get a much better tax rate if the income is classified as capital gains. For 2014, the maximum capital gains tax rate is 20% while the ordinary income rate is a maximum of 39.6%! In addition, income that is classified as capital will not be subject to the self-employment tax. That is an additional tax of 15.3% for 2014!