Christmas Tree Farmer

[bheizer]

Hi For the first time I have a client that decided to plant Christmas trees on 35 acres he inherited. He went to the Soil and Water Conservation office and received a cost share for planting the trees. Does anyone know of a good site that I can find out how to deal with this new venture?

I know he won't be selling the trees for I'm guessing 6 years but if he lets people come in and cut their own trees is that self employment income or capital gain?  What if he cuts and sells to people that come to his farm? Is there a difference how income is handled?

What about costs of trees that he just planted and the upkeep?

Any suggestions of site that might explain the "rules" of Christmas tree farming would be appreciated. 

Thanks.

[qbteachmt]

Did you google:

christmas tree farm tax reporting

Such as:

https://www.timbertax.org/getstarted/christmastrees/

Make sure to read up for both State and Fed issues.

I think it's a 5-year delay in Montana. They typically do a lot of shearing in the mean time, though.