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Little-known tax benefit helps Christmas tree growers
An accountant says many Christmas tree growers could be saving a lot of money at tax time.
Andrew Bosserman is a Certified Public Accountant who has also owned a tree farm. He tells Brownfield Christmas tree growers should seriously consider counting tree sales as capital gains income instead of ordinary income to save on taxes. “Ordinary income, those are the rates you generally hear in the news but they range from 10-37 percent, whereas capital gains are zero to 20 percent, and actually, most people will pay about 15 percent.”
Bosserman says there’s another area of savings by using the capital gains schedule. “Ordinary income also is often subject to self-employment taxes, which is another 15.3 percent, so really, you’re looking at savings of probably 20 percent or more just on the tax rate.”
Bosserman says the trees have to be at least six years old, but that’s no problem since most Christmas trees are older than that when sold.
Bosserman spoke to Brownfield during the Wisconsin Fresh Fruit and Vegetable Conference in Wisconsin Dells, Wisconsin Monday.
AUDIO: Andrew Bosserman discusses how Christmas tree growers can save tax dollars using capital gains instead of ordinary income with Brownfield’s Larry Lee.
Interesting. So, here in the south, a tree matures in 3 to 4 years. The only way to use capital gains would be to allow the tree to grow for longer, which would really be impractical for southern growers.