Law Faculty Articles and Research

No More Parking Lots: How the Tax Code Keeps Trees Out of a Tree Museum and Paradise Unpaved

Francine Lipman, Chapman University

This article was originally published in Harvard Environmental Law Review, volume 27, in 2003.


Conditions are ripe for harvesting tax benefits provided to private owners of forest land. As our exploding population paves more paradise, government agencies provide economic incentives to motivate private landowners to engage in conservation activities. With real estate values escalating to unprecedented highs and individual marginal income tax rates and stock market values continuing to decline, now may be a fruitful time to capture inflated real estate values and enhanced tax benefits. This article analyzes five different tax incentives that Congress enacted to encourage forest landowners to engage in conservation activities. The tax provisions presented and analyzed are the reforestation expenditure amortization deduction, the reforestation tax credit, preferential treatment for gains and losses from timber sales and the conservation easement. The article concludes with a hypothetical example of how these tax incentives can mitigate the differences between a private landowner's economic interests and the public goal of preservation.