A timber deed is one method of selling timber. Where a timber deed is
used, the title to the timber passes to the buyer when a properly executed
deed is delivered and recorded. Under a timber deed:
- Seller conveys all liability and risk in timber to buyer upon deed
execution and payment.
- Seller receives a one-time, fixed amount payment in exchange for
the deed. The gain or loss in the timber cut-out and decision on use belongs
solely to the buyer.
- Some deeds are specified to be a certain length of time in duration.
Timber uncut after that period reverts back to seller, unless seller voluntarily
grants or sales an extension to buyer.
- Capital gains tax may not apply for certain sellers who use “Timber
Deeds” based on their frequency of past timber sales.
