The Unique Tax Advantages of a Timber Investment

Abstract

Timberland investments have become an increasingly popular alternative asset class as investors search for competitive returns and portfolio diversification. In addition to the investment attributes of timberland, taxable investors stand to benefit significantly from certain unique tax advantages. In this brief article, the author explores the tax efficiency of timberland investments relative to traditional asset classes, reviews three of the primary tax advantages, and discusses the means to invest in the asset class. In addition, the article also provides a summary financial model to further illustrate the details of the tax advantages.